Jet fuel prices have more than doubled in the last three weeks, representing an additional $11 billion in annual costs if prices stay at that level, according to United Airlines CEO Scott Kirby. The underlying cause: Brent crude oil prices surpassed US$100 per barrel for the first time in four years, rising to US$126 per barrel at its peak following military conflict in the Middle East.
What began as a regional geopolitical dispute has metastasised into the aviation sector's most severe operational challenge in a generation. A complete cessation of oil exports from the Gulf region amounts to removing close to 20 percent of global oil supplies from the market, about 80 percent of which is shipped to Asia. The mechanism was not a traditional military blockade but something more subtle. Iran did not use underwater mines or rely on anti-ship missiles, but focused on selectively deploying drone strikes, and all of a sudden, insurers and shipping companies decided that it was unsafe to traverse that very narrow S-curve of that waterway.
This supply shock has forced airlines into contingency planning of unprecedented scope. United spent $11.4 billion last year on fuel, meaning current prices could send that total expense past $20 billion this year. Yet rather than weathering the storm, carriers have begun announcing structural adjustments. U.S. airlines could face $24 billion in additional jet fuel expenses, with ticket prices needing to rise at least 11% to offset the increase; globally, the impact could reach $100 billion or more.
The immediate response has been swift. Qantas and Scandinavian Airlines announced they would raise fares in direct response to rising fuel prices. Air New Zealand said it plans to cancel 1,100 flights, impacting more than 44,000 passengers, between now and early May. Others are pursuing longer-term strategies. Air France-KLM plans include cutting service to parts of Asia if fuel costs for return trips to Europe become more difficult, with the airline noting that Southeast Asia is much more dependent on fuel coming over the Gulf than Europe is.
The vulnerability of major carriers is striking. No major U.S. airlines hedge their fuel costs, meaning all are exposed to this price spike. United's plans assume oil hits $175 a barrel and doesn't go back down to $100 until the end of 2027. This horizon extends well beyond the immediate crisis, suggesting industry executives see this as a structural, not cyclical, challenge.
The economic consequences extend far beyond ticket prices. Risks are particularly acute for the Asian garment industry, which relies on petrochemicals shipped through the Strait to produce synthetic fabrics, and about 85% of polyethylene exports from the Middle East go through this route, raising the price of packaging, automotive components, and consumer goods. Transport firms are warning of higher prices and potential shortages as they cut operations in response to fuel costs.
Counterarguments to immediate pessimism exist. Some analysts predict that the strait will partially reopen within two to three weeks, which will take the edge off the crisis and allow tankers and cargo ships to start passing through. Strong traveller demand has temporarily cushioned revenue impacts; eight of Delta's top 10 days for ticket sales happened in 2026, five of them since the start of the war. Insurance schemes and potential government support may ease some carriers' exposure.
Yet the underlying mathematics remain sobering. The airline industry operates on thin margins, and prolonged fuel costs that compress profitability will eventually force capacity cuts and route reductions that travellers cannot avoid. A closure of the Strait of Hormuz that removes close to 20 percent of global oil supplies from the market during second quarter 2026 is expected to lower global real GDP growth by an annualised 2.9 percentage points in second quarter 2026. What happens to aviation when global growth falters is a question industry leaders are struggling to answer while hoping the Middle East conflict de-escalates before they must find out.