Vietnam Faces Mass Flight Cuts as China and Thailand Ban Jet Fuel Exports

The Middle East conflict is grinding on. The Strait of Hormuz is blocked. Oil prices are surging worldwide. And Vietnam's airlines could begin cutting flights as early as April — on both domestic and international routes.

Jet Fuel Prices Triple in a Month

After US and Israeli strikes on Iran in late February, Iran's Revolutionary Guards blockaded the Strait of Hormuz, disrupting roughly 20% of the world's oil and gas shipments.

Singapore-traded Jet A-1 aviation fuel soared from $83-89 per barrel in January and February to $231 in early March — a 160% jump in days. Fuel typically accounts for 30-40% of airline operating costs.

China and Thailand Cut Off Exports — Vietnam's Biggest Suppliers

Vietnam imports more than two-thirds of its jet fuel, with 60% coming from China and Thailand. Both countries have suspended fuel exports in response to the Middle East crisis.

Vietnam's two main fuel importers, Petrolimex and Skypec, told the Civil Aviation Authority of Vietnam (CAAV) they can only guarantee supply through March. April contracts may go unfulfilled. Suppliers in Singapore, Thailand, and China are also delaying shipments — and some may invoke force majeure to cancel contracts entirely.

On March 9, the CAAV issued a formal warning that "from early April, Vietnamese airlines face the risk of jet fuel shortages."

Domestic Refineries Can't Fill the Gap

Vietnam has two refineries — Dung Quất and Nghi Sơn — that together cover roughly half of domestic fuel demand. But their jet fuel capacity is limited, and both are already running at full tilt.

Domestic output falls far short of covering the import shortfall.

Vietnam's national petroleum reserves aren't reassuring either. Commercial and strategic reserves combined total about 30 days' worth of supply. The actual strategic reserve covers just around 7 days. The prime minister has ordered a study on raising reserves to 90 days of imports, but that won't help in the short term.

How Much Airlines Stand to Lose

Vietnam Airlines estimates that if jet fuel stays around $230 per barrel, its full-year losses could reach VND 30 trillion. Vietjet Air's monthly fuel costs have jumped by roughly VND 2 trillion.

Beyond prices, the closure of Middle Eastern airspace has disrupted routes. Vietnam Airlines flights to Europe, which normally pass near Iranian airspace, now must reroute through Central or South Asia — stretching flight times from about 10 hours to over 12, burning more fuel in the process.

Middle Eastern carriers have also pulled back from Vietnam. Emirates has repeatedly suspended its Dubai-Ho Chi Minh City service. Qatar Airways has been canceling flights between Hanoi, Ho Chi Minh City, and Doha. Since late February, dozens of Middle East-bound flights have been scrapped from Vietnamese airports, affecting thousands of passengers.

What the Government Plans to Do

The CAAV has told airlines to review their operations and prioritize domestic route assessments. Airports have been asked to prepare extra parking stands in case aircraft are grounded due to fuel shortages. Skypec has even suggested that if the conflict persists, aviation should be restricted to essential domestic routes only.

On fares, the CAAV recommends allowing a fuel surcharge on domestic tickets — currently not permitted — while reducing aviation fuel taxes and cutting landing and air navigation fees, as was done during COVID-19.

The CAAV has also proposed sourcing fuel from South Korea, Japan, Brunei, and India, but acknowledged that "finding new suppliers under the current circumstances is very difficult."

What Comes Next

March fuel supplies are secure for now. April is the real test.

If the Middle East conflict continues, the Strait of Hormuz stays closed, and China and Thailand don't lift their export bans, Vietnam's aviation industry faces large-scale flight reductions — and possibly route suspensions. Domestic routes would be hit first, but international services won't be spared.

For travelers, higher airfares are all but certain in the near term, and flight options will shrink. Anyone planning to fly to or from Vietnam should confirm flight status early and build in extra flexibility.