Could Europe have ‘maybe 6 weeks of jet fuel left’?

A global energy boss says Europe is running out of jet fuel. It's world business expanse from the BBC World Service on Lannaburn. China is reporting positive growth numbers, so what's driving that? And how a fire down under is making fuel shortages in Australia even worse. Yes, the head of the International Energy Agency has warned Europe may have a little as six weeks left of jet fuel, as the airline industry struggles with the impact of the Middle East crisis. The tap bear all says the blockade in the Strait of Hormuz could trigger what he calls the largest energy crisis the world has ever faced. Two big problems, first, the high prices and second, availability of gas, availability of the jet fuel, diesel and others. Impact of it in two big ways. One is the higher petrol prices, higher gas prices, higher electric prices. The second one is if it continues like this, if we cannot find a solution, namely opening up of the state of Hormuz, we may well see some of the products, petroleum products, may well be absent in the market. I was Fathi Biroff from the IEA. Bill Denning is with us, Chief Investment Officer at W1 M in London. Bill, we have the low-cost European carrier, EasyJet reporting today saying it expected to make a hefty loss in the first half of this year. Generally, is that the broad picture with airlines these days? Yes, I think that is going to be the case as we digest this problem with the price of jet fuel, even if it's available because obviously that price has been going up and that's crimping their profit margins. The energy shock is going to be compressing demand. A lot of airline flights are discretionary consumption. People don't have to go on holiday on an airplane. The airline industry is very cyclical. If we are going to see a growth slowdown as people have spent more money on energy and have less money for other things, the airline industry is right in the apex of that bad news as well. I'm sure it's in their share price too. Yes, as indeed the airlines across Europe have been pretty weak in recent weeks. I think that's understandable. At the same time, there will be big beneficiaries if there is a resolution to this that's a positive. Bill, you stay right there. European Union has just launched its own age verification app which teenagers could use to access social media. It could also block anyone under 18 from pornography and gambling sites. It comes as present, Emmanuel or Macron. Prepare us to host a video meeting of European leaders aimed at maintaining pressure for a social media ban for under 15s. Now China says its economy grew by 5 percent in the first quarter, helped by exports, high tech manufacturing and government support. It was also more than expected. At the same time, the war involving Iran is adding fresh risks to growth. Mashaeng Yang, deputy head of the China's National Bureau of Statistics says the impact of volatile oil prices has so far been limited. We're looking at the three cents from the supply side, as well as the three key areas of demand. Performance has been relatively strong across the board. In particular, the first quarter of last year represented the highest base for China's economic performance. So achieving a total of stats this year don't touch a high base. Again, it's the backdrop of a high base and more complex and challenging its general environment. We've had a good start to the air, which is truly rare and commendable. This fully reflects the resilience of the Chinese economy. But does this really point to a strong economy? That's a question I asked Hansen Lin, China's country director at the Asia Group in Shanghai. The number came out stronger than expected. But one of the things to keep in mind is that the data seems to suggest it's more of a tactical stabilization, not what you would call a structural turn. In other words, you've got policy support. A lot of front-loaded activity are lifting the near-term growth, but that weakness in property. I have accepted confidence, external demands suggest that the recovery is still a bit uneven and someone argue fragile. But what's actually interesting is that there's been a lot more view of maybe China as a safe haven. So we're continuing to start seeing global capital flows coming into China. So in other words, even despite the economic numbers, there is a sense of a sentiment about China. To one extent, is this number being propped up by government support? And what happens when that support starts to fade? There is a strong argument that the growth is still very much policy-led. So when you think about the fiscal expansion, the targeted credit, that's what's really doing the heavy lifting right now. While the household consumption, the private investment is still lagging. So until we start seeing confidence more at the micro level, I think China's growth is still going to continue disproportionately based on state-driven momentum. Now, you've got rising energy prices because of the Middle East conflict. China is relatively insulated, but it's not immune. So where do you see that pressure showing up first? It looks like it might start being pressure on the consumer side. And so one of the things we've been watching is that the consumer recovery is still gradual and cautious. The service spending is improving, but the households are very much risk-averse, and they seem to be prioritizing savings and income certainty and trying to figure out the property market situation. So a durable consumption rebound is going to really depend on a stronger labor market signal and wealth stabilization. But we're starting to see that the oil prices are starting to permeate within the economy. So it's going to be a challenge for the consumers. That was Han Chenlin from the Asia Group. The UK has also reported its growth numbers. Its economy grew by 0.5% or half a percentage point in February, more than expected bill. Now, stronger than expected growth. But we have a middle-east conflict in our hands, so how fragile is that recovery? Well, that's right. I think it's going to be very fragile. I mean, it's encouraging that we're going into this energy shock and geopolitical risk with a stronger UK economy than a lot of people thought. But it's not telling us anything really about how the economy has done last month or this month or indeed going forward. I think there are lots of challenges ahead, not least if the Bank of England, which the market expects the Bank of England to raise interest rates this summer, to counter the inflation shock. So that would be a bad thing for growth as well. And Japan's Nikkei, it's hit a record high. What's driving that rally today? Well, I think some of it is abounce of the fact that Japan was one of the worst hit markets last month in the early days of this. They're very, very dependent on, totally dependent on imported energy. But it is encouraging. It's another sign that stock markets around the world are actually looking through this. They think that peace is in the offering, is in the offering. And if that's the case, that would be bullish for other markets too. Well, but we'll take anything we can get. Building Chief Investment Officer at W1M in London. Thank you so much for joining us. Now, like many nations around the world, Australia has been affected by fuel shortages and price hikes as a result of the Iran War. It has just two oil refineries of its own. And later on Wednesday night, a huge fire engulfed one of them in Gilaong in the South Eastern state of Victoria. Our correspondent Simon Atkinson is in the nearby Melbourne. The fire is now out. There's inspections going on to see exactly how bad the damage is. But also to get a sense of what the impact is going to be. Because I think now the concern is what this is going to mean for Australian fuel supplies. Australia only has two oil refineries. It had six a decade ago. And people have been talking about this quite recently as the issue of fuel supplies has been brought right into focus by the closure of the Strait of Hormuz. Australians have seen fuel prices. Look at diesel has doubled since the start of the war. Petrol has up by $1.00 a litre. And so the concern is that the loss of petrol from this refinery is going to mean higher prices at the pumps. 10% of all the petrol used in Australia is refined at that refinery about an hour. Southwest of me here in Melbourne. 50% of everything used in this state comes from there as well. So the potential is quite big for problems. It couldn't really have come at a worse time. [BLANK_AUDIO]