In our previous situation report, we covered the direct consequences of the Hormuz crisis for crude, LNG, and power prices. Eight weeks on, the crisis has opened a second front. Europe is running short of jet fuel, and what started as an aviation problem is now feeding directly into energy prices and how power is traded.

Where the fuel shortage stands

Gulf jet fuel exports have plunged roughly 80% since the Strait of Hormuz closed on February 28. Europe depended on that route for roughly 40% of its jet fuel imports. US emergency exports have hit record levels but are covering only about half the deficit.

ARA hub stocks have fallen to a six-year low, dropping 8% week on week. Spot prices have nearly doubled. The IEA warns roughly six weeks of supply remain. Italy is already in physical rationing, with Air BP imposing hard volume caps at four airports. Airlines across Europe are cutting thousands of flights.

That is the aviation headline. What matters for the energy market is what sits underneath it.

What this means for electricity prices

Gas is still setting the price, and gas is elevated. Natural gas remains the marginal price-setter in most European electricity markets despite accounting for only 18 to 20% of total generation. That structural link means every move in TTF feeds straight through to the power price. Dutch TTF spiked 68% to €52.8/MWh in the first days of the crisis and has stayed well above pre-war levels. Day-ahead power in Italy and Germany has reached €120 to €150/MWh, roughly double the same period last year.

Refineries are pulling harder on gas and power. The push to maximise kerosene yields has European refineries consuming more gas and electricity while pulling output away from diesel and heating gasoil, tightening the entire refined products market. Industrial energy costs are rising not because of any single commodity, but because every part of the barrel is under pressure at once.

Summer demand curves are being redrawn. Greece, where tourism accounts for roughly 20% of GDP, and Cyprus are both facing economic downgrades as reduced aviation capacity cuts into peak travel season. Fewer flights means fewer tourists, which means lower cooling and hospitality loads in southern European and island grids. The summer demand profiles power traders are positioning against look materially different from the ones modelled in January.

What this means for energy trading

The jet fuel crisis is compressing the timeline on decisions that were already getting harder.

Wholesale gas contracts written against pre-crisis TTF levels are deeply out of the money for sellers and increasingly expensive for buyers to roll. Utilities writing capacity auctions for winter 2026/27 face the same problem we flagged in the Hormuz brief: even if the Strait reopens tomorrow, tankers take roughly three weeks to reach Rotterdam, and insurance markets need demonstrated safe passage before they restore cover. The physical supply gap for this summer is largely locked in.

For renewables, the economics keep moving in one direction. Gas plants clearing at today's TTF make solar and wind PPAs structurally more attractive. S&P Global noted in January that rising capture prices and lower breakevens were already set to revive the European PPA market. The gas spike has accelerated that shift. Corporate buyers locking in gas-linked power now are taking on more duration risk than the forward curve suggests.

The April 17 false reopening showed exactly how fast this environment moves. Iran declared the Strait open on a Friday. Day-ahead prices repriced within hours. The IRGC re-closed it and fired on ships the next day. Intraday spreads widened sharply. Balancing costs jumped. Ancillary services repriced as flexibility premiums spiked. All within a single weekend.

Asset owners trading only through day-ahead were reacting to a price that had already moved twice by the time they saw it. The value now sits in routing the same megawatt-hour across day-ahead, intraday, balancing, and ancillary products in real time, capturing spreads that open and close within hours on geopolitical signals. AI-driven forecasting and automated execution are what it takes to stay in front of a grid that reprices multiple times within the same trading session.

What to watch

The US-Iran ceasefire expires today. Non-extension pushes every timeline earlier and widens spreads further.

ARA hub stock data. A second week of 5%+ decline confirms the drawdown is accelerating. This is the most important leading indicator for when the shortage reaches core European hubs.

Marine war-risk insurance. Until insurers reinstate cover, diplomatic announcements do not translate into physical barrels. This is the metric that separates a real reopening from a headline.

Southern European demand shifts. If aviation cuts to Greece, Spain, and Portugal materialise at the scale forecast, summer load profiles will deviate from historical baselines. Traders positioning against last year's curves will be wrong.

The bottom line

Europe's energy supply chain runs through a single chokepoint, and that chokepoint is closed. The damage to summer 2026 is largely locked in regardless of what happens diplomatically this week.

Gas prices are elevated and gas still sets the marginal power price. Refineries are consuming more energy. Tourism economies are contracting. All of this is repricing day-ahead, intraday, and balancing markets simultaneously. Five European countries are on track to save 58% on energy bills this year thanks to clean power, a number that shows exactly how much exposure remains for those still dependent on gas-fired generation.

Asset owners and power traders are operating in a grid that now reprices on geopolitical signals that arrive without warning, multiple times within the same session. Trading systems that move across day-ahead, intraday, balancing, and ancillary markets in one view are capturing spreads that single-market approaches miss entirely.