The Hormuz Crisis and the SAF Pipeline
Axial Intelligence | SAF Project Tracker | April 2026
The Strait of Hormuz remains closed. On 17 April, Iran’s foreign minister announced the strait was open to commercial traffic for the duration of the US-Iran ceasefire. Oil prices fell approximately 11% on the announcement. On 18 April, Iran reversed course and reinstated restrictions, citing the continued US naval blockade of Iranian ports as the reason. The strait has been effectively closed since 2 March, with a 24-hour window of partial reopening on 17 April (Al Jazeera, NPR, CNN, 17-18 April 2026).
Jet fuel prices across major hubs remain well above pre-crisis levels, though they have retreated from the early April peak. The Axial Intelligence SAF Project Tracker, covering 279 projects and approximately 19.5 Mt/yr of probability-weighted capacity, provides a structured lens on three questions that matter for SAF market participants as the crisis enters its eighth week.
1. Jet Fuel Is Volatile, SAF Is Structurally Less Responsive
Conventional jet fuel prices have moved in three phases since the crisis began.
Using same-source data from the Argus US Jet Fuel Index (a simple average of Chicago, Houston, Los Angeles, and New York spot assessments, published daily by Argus Media under license to Airlines for America):
Pre-crisis (27 February 2026, one day before the US and Israel began strikes on Iran): $2.50/gallon
Crisis peak (2 April 2026, four weeks after the Hormuz closure): $4.88/gallon, a 95% rise from pre-crisis
Latest (21 April 2026, three days after the second Hormuz closure): $3.99/gallon, down 18% from the peak but still 60% above pre-crisis
The decline from $4.88 to $3.99 reflects market response to the brief 17 April Hormuz reopening and to arbitrage flows from the US and other non-Gulf sources. Prices remain well above pre-crisis levels, and the second closure on 18 April has halted the downward move.
S&P Global Platts data from 4 March 2026 showed US West Coast conventional jet at $3.59/gallon and California HEFA-SPK SAF at $8.85/gallon, a 147% premium, down from a pre-crisis premium of approximately 223%. SAF prices are driven primarily by feedstock and processing economics, which have risen modestly. Conventional jet is driven by crude oil and refinery utilisation, both severely disrupted.
Note: Same-source, same-date SAF pricing for 21 April 2026 is not available in public sources at time of publication. The 4 March Platts snapshot is retained as a reference point for the premium-compression finding.
For airlines evaluating long-term offtake agreements, the structural argument strengthens: when conventional jet fuel can rise 95% in four weeks and fall 18% in two, fixed-price SAF contracts look less like a sustainability cost and more like a volatility hedge. That logic holds even as jet fuel retreats from its peak.
2. The Middle East Pipeline Is Directly Exposed
The Axial Intelligence tracker covers 15 SAF projects in the Middle East, across Saudi Arabia, the UAE, Oman, and Turkey, with a combined gross capacity of 1,572 kt/yr and probability-weighted capacity of approximately 434 kt/yr.
The exposure profile of this regional pipeline is stark:
Only 2 projects (10 kt combined) are Operating. Both are small-scale co-processing units.
5 projects (720 kt gross, 278 kt weighted) are at Pre-FID.
7 projects (842 kt gross, 145 kt weighted) are at Announced stage.
1 Construction-stage project (the NEOM e-fuel demonstration plant in Saudi Arabia, demo-scale at sub-1 kt) accounts for the remainder.
More than 99% of the region’s gross capacity sits at Pre-FID or Announced, stages that carry 40% and 20% baseline commissioning probabilities respectively. Under current conditions, with Hormuz closed for the second time in two months, damaged regional refining infrastructure, and elevated financing risk, those probability assignments may prove generous.
Probability disclosure: Three of the 15 regional projects carry analyst-adjusted probabilities below their stage baseline, reducing the regional weighted capacity by approximately 33 kt versus a pure stage-baseline calculation. The 434 kt figure reflects those adjustments. A pure stage-baseline-weighted total would be approximately 467 kt.
The practical consequence: the Middle East’s 434 kt of weighted SAF capacity, already modest at 2.2% of the global weighted total, faces material downside risk. Projects that depend on imported feedstock, Gulf port access, or regional energy infrastructure for green hydrogen production are in the most exposed position.
3. Policy Frameworks Are Already Adjusting
Three policy and industry responses have emerged since the first edition of this analysis.
Singapore (25 March 2026). The Civil Aviation Authority of Singapore deferred the SAF Levy by six months. The levy will now apply to tickets sold from 1 October 2026 (previously 1 April 2026), for flights departing from 1 January 2027 (previously 1 October 2026). CAAS attributed the deferral directly to the Middle East conflict. Singapore’s 1% SAF uplift target shifts from 2026 to 2027. Source: CAAS press release, 25 March 2026.
Singapore’s levy is not a hard blending mandate; it is a fixed-rate passenger ticket charge that funds central SAF procurement by CAAS. Even so, the deferral is the first formal SAF policy action publicly attributed to the Hormuz crisis.
European Union (22 April 2026). The European Commission is publishing today a contingency package addressing jet fuel and diesel availability, refinery capacity, and energy security. According to drafts reported by Bloomberg, Al Jazeera, and Reuters ahead of publication, the package includes coordinated monitoring of fuel stocks, a new jet fuel observatory, potential joint purchasing of kerosene, possible release of emergency reserves, and measures to boost SAF production. The IEA warned on 16 April that Europe has approximately six weeks of jet fuel stocks remaining if Hormuz does not reopen. Independent jet fuel stocks at the Amsterdam-Rotterdam-Antwerp hub fell to a six-year low in the week ending 15 April (Argus Media, 16 April 2026).
For the SAF pipeline, the EU response points in two directions at once: short-term demand-side pressure on the ReFuelEU 2% mandate as airlines cut capacity and costs rise, and medium-term supply-side support if the Commission follows through on SAF production measures.
Airline capacity cuts. Aer Lingus announced on 19 April that it will cut approximately 500 flights over the summer. Lufthansa has permanently withdrawn 27 aircraft from its CityLine regional subsidiary. Air France-KLM has cut selected routes. United Airlines moved in March to reduce approximately 5% of planned Q2 and Q3 capacity. These cuts reduce aviation’s near-term SAF blending obligation in absolute terms, even where percentage mandates remain unchanged.
What the Full Tracker Reveals
The project-level analysis, including which Middle East facilities face the highest compound risk, which feedstock supply chains are most disrupted, and how mandate delays and airline capacity cuts affect weighted capacity by region, is available to Axial Intelligence subscribers.
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Analysis date: 22 April 2026. Tracker data cut: April 2026 (279 projects). Jet fuel prices from Argus US Jet Fuel Index via Airlines for America (21 April 2026, 2 April 2026, 27 February 2026). SAF premium reference from S&P Global Platts (US West Coast and California, 4 March 2026); same-source, same-date SAF pricing for 22 April was not publicly available at time of publication. Singapore SAF Levy information from CAAS press release (25 March 2026). EU jet fuel measures from Bloomberg, Al Jazeera, Reuters, and RTE reporting (19-22 April 2026). Airline capacity actions from public carrier announcements (March-April 2026). The Strait of Hormuz remains closed as of 22 April following the 18 April re-closure. All findings should be read as conditional on the persistence of current disruption levels.
Source: Axial Intelligence SAF Project Tracker, data cut April 2026. Market data, policy data, and corporate actions attributed inline.