Europe is facing a challenging summer. 

As holidays loom, citizens are seeing travel disruption. For many air travellers, the cost of their holidays has increased – in some cases they’ve multiplied several-fold. Jet fuel prices have more than doubled since the beginning of the conflict – and this cost is being borne by holidaymakers this summer. Others are seeing their flights cancelled altogether.

The European aviation sector is ready to transition 

The EU has responded with an emergency package to help stabilise supply, but the crisis has already laid bare the sector’s deep dependence on imported fossil jet fuel. This dependence is now a visible financial, operational, and geopolitical risk.

But the aviation sector doesn’t need to be this reliant on imported fossil fuels. It has a clear transition pathway – and the regulatory environment to drive it.

In our latest briefing, “Impacts of the Iran war on aviation fuel markets and implications for aviation decarbonisation” we show how policies like ReFuelEU Aviation, the EU Emissions Trading System, and the Sustainable Transport Investment Plan are not just climate regulatory tools. They represent market signals for an aviation sector that is less reliant on imported fossil fuels and support a more resilient European industrial base. 

Yet, many in the aviation sector – from fuel providers to airlines – are calling for measures, like ReFuelEU, to be weakened in the wake of the fuel crisis and for the temporary suspension of the EU Emission Trading Scheme. This is a mistake. Weakening these policies only prolongs exposure to future shocks.

A different future for European aviation 

Energy-dense liquid fuels with a lower carbon intensity remain essential for the decarbonisation of aviation. Among available options, e-kerosene stands out as the only scalable sustainable drop-in alternative to conventional jet fuel. It combines high emissions reduction potential with lower reliance on imported feedstocks sourced from outside the EU. 

Contrast this to biofuels. In recent years, there has been increasing questions around the sustainability and availability of the feedstocks needed for these fuels – not to mention their sustainability claims. Europe’s long-term aviation strategy should prioritise fuels that have the highest environmental credentials and that also allow for greater scalability, such as e-kerosene. This will not only support the sector’s climate transition, but be a major  industrial opportunity.  

Time for oil and gas to step up

So who should drive this transition? The current crisis has also shown the disparity in how energy shocks are felt across the aviation supply chain. 

On one side we have airlines. They are facing rising operating costs, implying flight cancellations and profit warnings. Global carriers lost US$53 billion in market value in the first month of the conflict.

On the other side we have jet fuel suppliers – predominantly oil and gas companies. These companies are benefiting from windfall profits as limited availability has led to fuel price rises, and are set to make up to $234bn by the end of the year. 

This imbalance matters. 

These oil and gas producers that dominate aviation fuel supply are also among the ones best placed to finance, develop, and deliver the low-carbon fuels needed and mandated by ReFuelEU.

This can take the form of project sponsorship, minority equity participation, technical partnerships, or bankable offtake commitments that reduce revenue risk for e-kerosenefuel developers. In particular, oil and gas investors should frame their engagement and stewardship strategies around whether investee companies have credible volumetric e-kerosene targets, understand the financial risks associated with non-delivery of the targets under ReFuelEU, and are opening infrastructure to third-party low-carbon fuel suppliers on transparent terms.

A stress test for investors

Investors should see the Iran conflict as a stress test for the aviation sector’s dependence on fossil fuels. 

As laid out in our briefing, we believe oil and gas suppliers need to move beyond passive compliance with ReFuelEU and take a leading role in building the alternative fuels market. 

That means investing in e-kerosene, signing long-term offtake agreements, opening airport fuel infrastructure on fair terms, and treating the transition as a core strategic responsibility rather than an optional add-on. 

For oil and gas investors in particular, the message is clear: companies that control aviation fuel supply should help the uptake of the fuels that will replace fossil kerosene. 

The broader lesson from the Iran war is that fossil fuel volatility is a structural transition risk for aviation, not a temporary disruption. 

If Europe wants a more competitive, secure, and resilient aviation sector, it needs to scale e-kerosene within a framework that combines strong policy, investment certainty, and industrial strategy. In that sense, this crisis does not weaken the transition case; it strengthens it.