War with Iran sends jet fuel prices soaring past 50%

Airlines face a fuel crisis from the war

Jet fuel prices in the U.S. have surged more than 50% since the U.S.-Israel military operations against Iran began on Feb. 28. The spike comes from disrupted oil production and shipping across the Middle East.

Fuel makes up roughly 20% to 25% of what airlines spend to operate, so this hits the industry hard.

Prices are climbing even faster than crude oil because refined fuel supplies face extra strain on top of the broader disruption.

A critical shipping lane goes quiet

The Strait of Hormuz normally moves about 20% of the world’s oil and gas supply.

Since the conflict started, tanker traffic through the strait has dropped below 10% of what it was before. Iran has moved to block the waterway, and shipping companies are steering clear because of the risk of attacks.

Energy consulting firms call it the largest oil supply disruption in history.

Middle Eastern refineries had been sending about 470,000 barrels of jet fuel per day through the strait to airports in Europe and beyond.

Airlines worldwide start raising fares

United Airlines CEO Scott Kirby said higher fuel costs would push airfare increases “quickly.”

Several international carriers, including SAS, Qantas, and Air New Zealand, have already announced fare bumps or fuel surcharges. Some routes between Asia and Europe have seen prices more than double.

Airlines with strong fuel hedging programs, like British Airways owner IAG, say they have no immediate plans to change fares.

Budget carriers without hedging face the toughest choices because they have the least room to absorb the hit.

Tens of thousands of flights get canceled

Between Feb. 28 and March 11, airlines canceled more than 46,000 flights in and out of the Middle East, according to aviation analytics firm Cirium.

Major hubs in Dubai, Doha, and Abu Dhabi shut down in the early days of the conflict.

Airlines still flying long-haul routes are rerouting to avoid Middle Eastern airspace, which adds hours and fuel costs to every trip.

Each extra hour in the air can tack on thousands of dollars in fuel and crew expenses per flight.

U.S. domestic flights keep running for now

Domestic flights within the U.S. are operating normally, with no widespread cancellations tied to the conflict. But airlines are expected to pass higher fuel costs on to travelers through gradual fare increases.

Travel analysts say the price bumps may show up first on international routes and in premium cabins. Some airlines could quietly pull their cheapest promotional fares rather than raise sticker prices.

Budget carriers have less room to absorb costs, so even domestic travelers may feel it soon.

Gas prices climb about 17% for drivers

The average price of regular gas in the U.S. has risen roughly 17% since the war began, according to AAA. Prices vary widely by state.

Diesel, which powers the trucks that move goods across the country, has jumped more than 20%. American households spend an average of about $2,500 a year on gas, so even small per-gallon increases add up fast.

The diesel spike matters beyond the pump because it raises shipping costs for almost everything Americans buy.

Economists warn inflation could pick up speed

Gregory Daco, chief economist at EY-Parthenon, estimated the gas price bump alone could push monthly inflation to 1% in March, the highest in four years.

Annual inflation could climb to about 3%, up from about 2.4% in January.

Higher fuel costs raise shipping prices, which can push up what people pay for food, packaging, and other everyday items.

Lower-income families get hit hardest because fuel and groceries eat up a bigger share of their budgets. Retailers may absorb costs for a while, but a long conflict changes that.

Record oil reserve release may not help fast enough

On March 11, the International Energy Agency (IEA) announced a release of 400 million barrels from emergency oil reserves, the largest in its history.

All 32 IEA member countries voted for it to address supply disruptions from the war.

Member nations hold more than 1.2 billion barrels in emergency stockpiles, plus about 600 million barrels in industry reserves.

But analysts point out the release focuses on crude oil, not refined jet fuel, so airfares may not see much relief. Oil prices bounced back after the announcement, a sign that markets see the move as not enough.

Oil prices swing wildly from day to day

Oil prices have been extremely volatile, briefly hitting levels not seen since 2022 before dropping sharply. On one day alone, the global benchmark fell more than 11%, its biggest single-day drop since March 2022.

The swings follow shifting war developments and statements from President Trump suggesting the conflict could end soon.

That kind of volatility makes it hard for anyone to predict where fares and gas prices land in the coming weeks. Airlines, travelers, and investors are all watching the same headlines.

Rising fuel costs ripple through everyday prices

Nearly everything Americans buy travels by truck, ship, or plane, and all of those costs rise with fuel prices.

Food prices could climb if oil stays high for more than a month, especially for fresh produce and imported goods.

Fertilizer, which depends heavily on natural gas, faces its own crunch because key producing countries sit in the war zone. About a third of the global fertilizer supply normally passes through the Strait of Hormuz.

Mortgage rates have also ticked up since the conflict started, adding pressure on homebuyers.

Travel experts say book sooner rather than later

If you see a domestic fare you can live with, travel experts say grab it now. Buy a full-fare economy ticket instead of a basic economy ticket so you can change it later if prices drop.

Booking with airline miles is another smart move, since mile-based tickets can often be canceled and refunded. Set up fare alerts with price-tracking tools on the routes you care about.

The one thing to avoid: the cheapest restricted fare classes, which are the hardest to change or cancel.

How long prices stay high depends on the war

Analysts say the length of the conflict matters most in deciding how high the costs go and how long they last. If the Strait of Hormuz reopens and oil flows resume, prices could ease within weeks.

But if the war drags on past a month, the pain could deepen across gas, food, and travel. One energy analyst compared a long disruption to a 1979-style oil crisis.

The situation remains fluid, and military or diplomatic shifts could change the picture fast.

This article was created with AI assistance and human editing.

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