Jet fuel prices double as Iran conflict disrupts global aviation

Tuesday 24 March 2026 - 12:50

By: Dakir Madiha

Jet fuel prices double as Iran conflict disrupts global aviation

Jet fuel prices have surged sharply in recent weeks, sending shockwaves through the global aviation industry as supply disruptions linked to the Iran conflict drive costs to levels not seen in decades.

Data from the International Air Transport Association shows the global average price of jet fuel reached 197 dollars per barrel last week, marking an increase of 83 percent in roughly one month. In the United States, the Argus jet fuel index climbed from 2.17 dollars per gallon before the conflict to 4.56 dollars by March 20, reflecting the rapid escalation in energy costs.

The surge follows military strikes on Iran that began on February 28 and the subsequent closure of the Strait of Hormuz, a critical route for about 20 percent of global oil supply. The disruption has tightened fuel availability worldwide and forced airlines to adjust operations.

Carriers across regions are responding with cost cutting measures and fare increases. Delta Air Lines said higher fuel prices added around 400 million dollars in costs in March alone. Executives at American Airlines and United Airlines reported similar pressures, with United announcing a planned 5 percent reduction in scheduled flights. Cathay Pacific has nearly doubled fuel surcharges, while SAS said it would cancel at least 1,000 flights in April. Air New Zealand has suspended its financial outlook due to uncertainty.

Analysts at S and P Global Market Intelligence said full year fuel spending forecasts for 2026 have been revised upward by about 9 percent for major airlines. At the same time, operating margin projections for the second quarter have been reduced by as much as 2.5 percentage points for some carriers, including Alaska Air and Deutsche Lufthansa.

The impact is particularly severe in Asia, where airlines depend heavily on Middle Eastern oil supplies. Philippine President Ferdinand Marcos Jr. warned that aircraft groundings are a real possibility, citing cases where airlines have struggled to secure refueling access abroad. Some carriers have begun loading fuel for return trips to avoid supply risks.

Cebu Pacific has announced route suspensions and reduced flight frequencies between April and October. Vietnam Airlines and VietJet Aviation have also cut services in response to rising costs and logistical constraints.

A key vulnerability is the lack of fuel hedging among US airlines, which leaves them fully exposed to spot price increases. According to Reuters, the four largest US carriers could face an additional 5.8 billion dollars in fuel costs this year if prices remain elevated. Airlines in Europe and Asia that use hedging strategies are only partially shielded, as jet fuel prices in Europe have exceeded 1,600 dollars per metric tonne.

Industry analysts say the outlook remains uncertain. As long as the Strait of Hormuz remains closed and energy flows are disrupted, fuel costs are likely to stay elevated, continuing to strain airline operations and global travel networks.