IATA urges rethink on fuel security as oil markets face disruption

The global aviation industry is calling for a reassessment of energy security strategies amid disruptions to oil and jet fuel supplies that expose structural vulnerabilities in the system.

The International Air Transport Association (IATA) has warned that the ongoing Middle East conflict could force governments to rethink how they secure energy, particularly for aviation, amid intensifying volatility in crude and refined fuel markets. Speaking at the IATA World Data Symposium in Singapore, senior officials said the crisis highlights long-standing gaps in planning and investment.

Oil dependence under scrutiny

Marie Owens Thomsen, IATA’s chief economist and senior vice president for sustainability, said the current situation underscores the risks of overreliance on fossil fuels.

“It is astonishing to me as an economist that the world is so complacent in living under the dominance of this monopolistic industry, which is oil,” she said, noting that more than 80% of global energy consumption remains fossil-based, reported by Aviation Week.

She added that repeated crises reveal the cost of insufficient investment in alternative energy sources. “Crises such as this show us the cost of underinvestment in alternative energy,” Owens Thomsen said.

Jet fuel gaps emerge as a key concern

Beyond crude supply, IATA flagged a critical gap in the way countries manage fuel reserves. Director General Willie Walsh said governments may need to rethink the composition of strategic reserves, shifting attention towards refined products such as jet fuel.

“Although we have strategic reserves of crude, we don’t appear to have any strategic reserves of jet fuel,” Walsh said. He added that policymakers may also need to reassess domestic refining capacity to ensure supply resilience.

The disruption has highlighted how aviation remains exposed not just to oil availability, but also to refining constraints, which directly affect jet fuel production.

Investment imbalance slows transition

IATA also pointed to a mismatch in global investment priorities. Owens Thomsen noted that global venture capital investment reached about $427 billion in 2025, with around $259 billion directed towards artificial intelligence.

By contrast, funding for sustainable aviation fuel (SAF) remains limited. According to Aviation Week, low-emission fuels accounted for just 1.2% of the $3.3 trillion invested in energy in 2025.

Owens Thomsen argued that if investment levels comparable to AI were directed towards SAF, the aviation sector’s funding needs could be met through 2039. The current imbalance, she suggested, is delaying the transition to more resilient energy systems.

Crisis as catalyst for policy change

The latest disruption may accelerate policy shifts, with governments increasingly viewing alternative energy not only as a decarbonisation tool but as a means of improving resilience.

“Had the world engineered the system with more foresight, perhaps this price shock could have been avoided,” Owens Thomsen said, adding that the current situation should serve as a warning for future planning.

At the same time, governments are seeking to reassure markets. Singapore said on April 7 that it has “many months” of energy reserves and that its jet fuel supply has not yet been affected, according to Aviation Week.

Industry faces prolonged uncertainty

Even as geopolitical tensions evolve, the aviation sector is likely to face continued uncertainty around fuel availability and pricing. Disruptions to refining capacity and supply chains can take time to resolve, extending pressure on airlines.

For policymakers, the message from IATA is clear: energy security strategies must evolve beyond crude oil stockpiles to reflect the realities of modern aviation.

Whether this leads to faster investment in alternative fuels or a redesign of reserve systems, the current crisis has exposed vulnerabilities that are difficult to ignore.