Bloomberg: Military Jet Fuel Volumes on NATO's CEPS Pipeline Squeeze Commercial Supply, Alkagesta Says

Commercial jet fuel deliveries through one of Europe's most important fuel arteries have been disrupted by military operations, according to comments made by Alkagesta founder and chief executive Orkhan Rustamov to Bloomberg.

Rustamov said that in March and April additional volumes of military-grade jet fuel were injected into the NATO Central Europe Pipeline System (CEPS) at Rotterdam. That, he said, pushed out a portion of civilian jet fuel supply and reduced deliveries to European airports, including the main aviation hub at Frankfurt. He declined to specify the volumes involved, citing potential security concerns, but described the additional barrels as equivalent to several days of Italian jet fuel and kerosene demand.

The trading firm supplies jet fuel into the CEPS but did not deliver through Rotterdam during the period in question; Rustamov said his information came from other users of the system. Bloomberg reported that the German pipeline service provider Fernleitungs-Betriebsgesellschaft did not immediately respond to requests for comment, while Deutsche Lufthansa and NATO declined to comment. Fraport, the manager of Frankfurt airport, said it does not maintain its own fuel stocks.

Why the CEPS matters

Established during the Cold War, the CEPS has long been authorised for civilian use on the condition that military requirements always take priority. Today it is an integral part of Europe's energy infrastructure, moving roughly 225,000 barrels a day of petroleum product across more than 5,000 kilometres of pipeline that connect refineries, depots, military airbases and civilian airports. The system mainly carries jet fuel but can also move diesel and other fuels.

Alkagesta's access to the network was itself the subject of earlier coverage: in February the firm confirmed arrangements to supply jet fuel and sustainable aviation fuel through the pipeline, a step reported at the time by Bloomberg and covered by this publication in [Alkagesta Secures NATO Pipeline Access for European Jet Fuel Supply](/news/alkagesta-secures-nato-pipeline-access-for-european-jet-fuel-supply).

A market with no slack

The timing is the difficulty. Europe's airlines and airports, several of them directly connected to the pipeline, were already contending with severe supply pressure before the additional military volumes appeared. Marine traffic through the [Strait of Hormuz](/news/hormuz-strait-blockage-triggers-global-jet-fuel-crisis-as-disruption-spreads-to-) — the route through which the region's imported jet fuel normally moves — has been largely halted for weeks. Jet fuel prices in northwest Europe reached a record earlier this month and some flights have been cancelled.

• The German airport association ADV said through chief executive Ralph Beisel that "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."
• The International Energy Agency has said shortages could begin to emerge in Europe in June.
• Ryanair has said its jet fuel suppliers are guaranteeing shipments until at least mid-May.
• Traders involved in the market expect European jet fuel balances to be tighter in May than in April.

Because military requirements sit ahead of commercial ones by design, even a modest reallocation inside the CEPS transmits directly to airport uplift schedules. In a normal year, buyers would cover a gap with waterborne cargoes from the Middle East; with Hormuz effectively closed, the substitution options are thin and expensive.

What it means

For jet fuel buyers, the practical lesson is that pipeline capacity is no longer a reliable constant in the supply stack. Traders and airline fuel desks working the northwest European market should treat CEPS access as a variable, price contingency into term arrangements, and secure alternative inland storage and truck-out options ahead of the June window flagged by the IEA. For shipowners and product traders, the displaced civilian barrels imply firmer freight demand on short-haul jet and diesel routes into Rotterdam and Antwerp, and continued backwardation in the northwest European jet complex until Hormuz traffic normalises.

Sources

• Bloomberg — Military Use of NATO Jet Fuel Pipe Disrupts Commercial Supply
• Alkagesta
• NATO Support and Procurement Agency — Central Europe Pipeline System
• International Energy Agency — Oil Market Report
• ADV — German Airports Association
• Fraport AG