US strikes three Iranian tankers as African airlines face new jet fuel shock

Reuters reported that US troops attacked the ships on Saturday after the US military accused Iran’s Islamic Revolutionary Guard Corps of firing ballistic missiles at an aircraft carrier and a guided missile destroyer.

U.S. officials said the warships evaded the missiles and no U.S. troops were injured. Associated Press⁠ reported that two Iranian tankers were disabled and a third empty vessel was destroyed.

Iran subsequently said it had attacked ships associated with America. This version has not been independently confirmed.

Although the confrontation took place thousands of kilometers from Africa, the continent’s dependence on imported fuel makes it unusually vulnerable to shocks around the Strait of Hormuz.

About 70% of jet fuel and kerosene imported into Africa passes through Hormuz, according to S&P Global data previously reported by Reuters.

Why African airlines are particularly vulnerable

According to the African Airlines Association, fuel typically accounts for between 30% and over 40% of African airlines’ operating costs, compared with a global average of 20% to 25%.

For South African low-cost carrier FlySafair, jet fuel accounts for between 50% and 55% of direct operating costs.

Such profits leave airlines with limited ability to cope with another sharp price increase. Carriers may respond by raising ticket prices, introducing temporary fuel surcharges, cutting flights or using smaller aircraft.

During the previous outage, FlySafair estimates that higher prices added approximately $2,070 (R35,000) to the cost of operating each Boeing 737-800 for one hour.

The airline subsequently introduced fuel surcharges and Airlink said it would adjust fares and consider reducing capacity if conditions warranted it.

The latest attacks do not automatically mean another round of rate hikes will follow. Prices will depend on the duration of the fighting, the availability of fuel from alternative suppliers, stock levels in Africa and whether there is another major disruption to delivery through Hormuz.

However, after the latest escalation, the price of Brent crude oil traded at $96 per barrel, maintaining pressure on oil refining and transportation companies.

Limited oil refining capacity exacerbates Africa’s vulnerability

A Reuters investigation found that Africa’s limited refining capacity makes it more vulnerable than regions with larger domestic fuel industries and deeper reserves.

Some African refineries are unable to meet local aviation demand, and others are operating inconsistently. Therefore, airlines and fuel distributors rely on supplies from the Middle East, Europe and Asia.

In South Africa, for example, there are only two large operating refineries left after larger operations closed. Import-dependent markets in East and Southern Africa are also vulnerable to longer delivery times and higher transportation costs when global supply routes are disrupted.

The immediate question is whether the latest confrontation will impact physical supplies or simply lead to another risk premium in oil prices.

No major African airline has announced a new surcharge specifically related to the September 5 attacks. Therefore, passengers should not assume that an increase is imminent.

However, with fuel already consuming a disproportionate share of airline revenues, persistent disruptions could quickly move from the Strait of Hormuz to ticket prices at African airports.