Aviation is often treated as one of oil’s safest remaining markets. In 2026 that still looks like a reasonable assumption. Airlines are expected to consume around 104 billion gallons of fuel this year, sustainable aviation fuel remains below 1% of total use, and virtually every commercial passenger aircraft in service still depends on liquid hydrocarbons.
But that view risks making the same mistake the oil industry made with cars: looking at the installed fleet rather than at the technology competing for the next route.
On July 30, Archer’s all-electric Midnight aircraft flew from Salinas to Monterey and back, taking roughly nine minutes each way. It was a piloted, coordinated flight, not the start of an autonomous urban air-taxi network. Archer itself is still working through certification, while its partners are participating in the FAA’s eVTOL Integration Pilot Program.
That distinction matters. But so does the speed of progress. Electric flight is no longer a laboratory curiosity. The more interesting question for oil markets is what happens when batteries begin winning the parts of aviation they are actually suited to serve.
The Electric Aircraft Is No Longer the Science Project
The first fully electric aircraft was type-certified by EASA back in 2020. The Pipistrel Velis Electro is only a two-seat trainer, but it proved that an electric aircraft and propulsion system could pass a commercial certification process.
The technology is now moving up the scale. In 2025, EASA certified Safran’s ENGINeUS 100, an electric motor platform intended to extend into applications of up to 19 seats. Heart Aerospace is developing its 30-seat ES-30, with a claimed 200-kilometre all-electric range and type certification targeted for 2031. Archer, meanwhile, is pushing the completely different eVTOL model into supervised real-world operating environments.
These aircraft will not replace a Boeing 787. They do not need to.
Road transport electrification did not begin by replacing every vehicle category at once. Buses, passenger cars and increasingly trucks electrified as battery economics and charging became suitable for each use case. Aviation is likely to be similarly uneven. Training, short cargo missions, island routes, air taxis and regional passenger services are the obvious early markets because their energy requirement is bounded and their aircraft return frequently to known infrastructure.
Where Batteries Work, the Economics Are Difficult to Ignore
The attraction is not simply that an electric aircraft has no tailpipe emissions. It is that electricity is a remarkably efficient way to produce motion. NASA is developing aviation electric machines with efficiency above 98%. Electric propulsion also offers fewer mechanically complex combustion components, lower noise and the possibility of using locally generated electricity instead of a globally traded refined oil product.
That last point looks more valuable in 2026 than it did a year ago. Middle East disruption has pushed IATA’s expected average jet-fuel price for this year to $152 per barrel, around 70% above 2025, adding roughly $100 billion to the industry’s fuel bill. Electricity is not immune to energy shocks, but an aircraft charged from a diversified domestic power system is not directly exposed to crude prices, refinery margins, tanker routes or a closure in the Middle East. Related: Mexico Is Betting on Biofuel to Tackle Its Seaweed Crisis
This is where the comparison with electric cars becomes relevant. Hydrogen and synthetic fuels can technically power road vehicles. Biofuels can technically replace gasoline and diesel. But battery-electric cars increasingly won the efficiency argument because converting electricity into a fuel and then converting that fuel back into motion throws away energy and adds infrastructure.
I suspect the same will happen in aviation – but only within the range envelope where batteries work.
Jet Fuel Still Has One Enormous Advantage
The strongest objection to battery aviation is also the correct one: weight.
Jet fuel contains vastly more energy per kilogram than today’s batteries, and an aircraft becomes less efficient every time extra mass must be carried into the sky. A NASA study of a notional 19-passenger electric aircraft found that roughly 600 Wh/kg at cell level would be needed to achieve a 250-nautical-mile mission with reserves – more than twice the capability assumed for then-current lithium-ion cells.
That is why sustainable aviation fuel will not follow hydrogen cars into irrelevance. Long-haul aviation needs dense liquid energy, and SAF has the huge advantage of working with aircraft and infrastructure that already exist. In 2026, however, global SAF supply is expected to reach only 2.4 million tonnes, or 0.8% of aviation fuel use. It also remains expensive.
So the likely outcome is not batteries versus SAF across all aviation. It is batteries taking the routes where electricity is technically sufficient, while SAF and eventually e-fuels fight for the much larger aircraft and longer routes where batteries remain impractical.
On those short routes, liquid fuels may eventually find themselves in the same uncomfortable position as hydrogen in passenger cars: technically possible, but economically hard to justify.
Oil Displacement Will Be Slow – Until It Isn’t
The near-term oil impact should not be exaggerated. The global aircraft fleet is old enough to need renewal, but replacement is painfully slow. IATA says the aircraft order backlog has passed 18,000 units and the average fleet age has reached a record 15.2 years. Most of those aircraft on order still burn jet fuel. Certification, charging infrastructure, battery supply and airport operating procedures will slow electric adoption further.
Archer illustrates the point perfectly. The aircraft can fly. Scaling dozens or hundreds of them through constrained urban airspace, charging them quickly, turning passengers around and operating economically is a different challenge. The FAA is already building dedicated research infrastructure to study issues including vertiport operations, wake separation and downwash.
But slow adoption should not be confused with small long-term consequences.
IATA’s 104 billion gallons of expected 2026 airline fuel consumption equates to roughly 6.8 million barrels per day. Electrifying just 1% of that fuel demand would displace about 68,000 barrels per day. At 10%, the arithmetic becomes roughly 0.7 million barrels per day. That is not a forecast, and today’s eVTOL market will displace only a fraction of it. It simply shows why oil markets should watch regional electric aviation long before electric aircraft appear at major international gates.
Electric aviation does not have to conquer the sky to matter for oil. It only has to become the obvious choice on the routes batteries can reach. If the economics develop anything as they did on the road, that may happen faster than the existing fleet suggests.
By Leon Stille for Oilprice.com
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