The ongoing blockade of the Strait of Hormuz has created a significant hurdle for the global energy transition, particularly within the aviation sector. As a critical artery for energy shipments, the restricted access has not only spiked traditional fuel prices but also disrupted the market for cleaner alternatives. According to TIME, the crisis has highlighted a major blind spot in decarbonization efforts, where volatility and economic uncertainty prevent necessary long-term investment in Sustainable Aviation Fuel (SAF).

Prior to the current disruptions, the Persian Gulf supplied over 40% of Europe’s jet fuel imports. While the sudden price surge for conventional oil has theoretically narrowed the cost gap between fossil-based kerosene and more expensive SAF—bringing the price premium down from three-to-five times to just under double—airlines remain hesitant. Faced with squeezed profit margins and intense geopolitical instability, aviation executives are currently unable to sign the long-term purchase agreements required to scale SAF production without clear regulatory mandates or government support.

Simultaneously, the refiners capable of producing these sustainable fuels are prioritizing operational stability over new investments. Rather than capitalizing on the current market environment, many companies are focused on mitigating the risks associated with the ongoing geopolitical crisis. This lack of capital commitment underscores a broader trend: while the energy transition is conceptually necessary, the current, volatile market conditions are stifling the transition in sectors like aviation that cannot easily shift to electrification or traditional renewable power sources.