Expensive jet fuel prices could be a blow to airline industry

The COVID-19 lockdowns and restrictions in the past two years has affected the functioning of a number of companies and industries. One of the most affected sectors during this phase was the airline sector. The travel demand had gone down due to which it had become tough for the airline to survive. But now it seems like the era is fading as the mask mandates are finally coming to an end and a number of people are renewing their old travel habits. But things are not as smooth as it seems for the airlines as it is migrating from one crisis to another over jet fuel prices.

Due to the recent Russian invasion in to Ukraine, it is leading to a decline in the global oil production and sales. The issue has now become more serious and the situation between Russia and Ukraine has led to a severe impact on the energy markets. To explain this in a more precise way, there is a possibility of a 5 to 10 percent decline in the global oil output due to the effective restrictions for trade with Russian oil. Another issue is the transportation of oil through the Black Sea. In the current situation the oil storage capacity of Russia is filled and the country might also need to shut down the oil wells.

The situation is not expected to improve unless the U. S. and the OPEC increase the production in a drastic level and it is expected that the energy shortage could turn worse. However, it is not very likely that the U.S and OPEC would be able to manage with the loses in Russia any time soon for the reason that it takes many months to drill new wells. For now the producers in the U.S are avoiding any new drills for the reason that the uncompleted oil well inventories have fallen since the past few years.

As for now , energy producers in the United States are not equipped to produce ample energy due to minimal free capital and the significant labor shortage.

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