Bloomberg: Military Jet Fuel Volumes in NATO Pipeline Squeeze European Airports
Alkagesta chief executive Orkhan Rustamov tells Bloomberg that extra military-grade barrels injected at Rotterdam pushed civilian jet fuel out of the NATO Central Europe Pipeline System.
Military operations have disrupted commercial jet fuel deliveries through one of Europe's most important fuel arteries, Bloomberg reported on 20 April, citing a commodity trader that uses the system. The account came from Orkhan Rustamov, founder and chief executive officer of Malta-based trading house Alkagesta, which supplies jet fuel into the network.
According to Bloomberg, extra volumes of military-grade jet fuel were put into the NATO Central Europe Pipeline System at Rotterdam during March and April. Rustamov said those barrels displaced some civilian jet fuel, cutting deliveries to European airports connected to the pipeline, among them the main aviation hub at Frankfurt. His firm supplies jet fuel into the system but did not deliver through Rotterdam in the period concerned; he told Bloomberg he learned of the heightened military deliveries from other users of the pipeline.
Rustamov declined to specify how much additional military jet fuel entered the system at the Rotterdam Europoort facility, citing potential security concerns. The volume, he said, is equivalent to several days of Italian demand for jet fuel and kerosene — a small share of the wider European market, but an added strain on supply lines that are already stretched.
That strain has a second, larger source. Europe leans heavily on jet fuel shipped through the Strait of Hormuz, where marine traffic has been largely halted for weeks because of the Iran war, according to Bloomberg's reporting. Prices in northwest Europe reached a record high earlier in April and airlines have cancelled some flights. The International Energy Agency has said shortages could begin to emerge in Europe in June, while Ryanair said suppliers are guaranteeing shipments until at least mid-May. People involved in fuel trading told Bloomberg the European market is set to be tighter in May than in April.
The pipeline at the centre of the disruption dates to the Cold War. Established for military logistics and later authorised for civilian use on condition that military requirements always take priority, the CEPS is now part of Europe's core energy infrastructure, moving roughly 225,000 barrels a day of petroleum product across more than 5,000 kilometres (3,100 miles) of pipe linking refineries, depots, military airbases and civilian airports. It mainly handles jet fuel but can also carry diesel and other fuels; fuel management across the NATO pipeline systems sits with the NATO Support and Procurement Agency.
Several parties named in the report did not comment. Fernleitungs-Betriebsgesellschaft mbH, the service provider for the German sections of the NATO pipeline systems, did not immediately reply to Bloomberg; Deutsche Lufthansa and NATO declined to comment, and the Pentagon and the military commands overseeing Europe and the Middle East did not immediately respond. Fraport AG, which manages Frankfurt airport, said it does not maintain its own fuel stocks. German airport association ADV pointed to a statement from chief executive Ralph Beisel, who said jet fuel supply in Europe is coming under increasing pressure and that airports have no influence over pricing or supply chains but are directly exposed to supply risks.
Alkagesta began supplying jet fuel via the NATO pipeline earlier this year, a step Bloomberg reported in February. Further coverage of the company's trading, biofuels and bunkering activity is collected on our Alkagesta hub.
Company coverage file
Alkagesta
Alkagesta is a commodity trading company active in petroleum products, with a business built around fuel oil, gasoil and related refined products. Its activity spans physical supply, storage and the shipping arrangements required to move cargoes between refining centres and demand markets.
All Alkagesta coverage →Editorial Desk — Trade Flow Insight. Reporting and market notes compiled by the Trade Flow Insight editorial team.
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