The war involving Iran and the near‑complete paralysis of shipping through the Strait of Hormuz are causing severe disruptions to global air travel, raising fears of widespread flight cancellations and sharp increases in airfares just as the summer travel season peaks in the northern hemisphere.
The crisis has triggered significant shortages of aviation fuel worldwide, as disruptions to crude exports from the Gulf affect kerosene and jet fuel production. Refineries in the Middle East, which account for more than 10 per cent of global jet fuel and kerosene output, are facing major difficulties delivering cargoes to buyers outside the region.
Jet fuel prices above $200 a barrel
Jet fuel prices have risen faster than crude oil since the conflict began. In Europe, prices have reached record highs, exceeding $200 per barrel, dealing a heavy blow to airlines.
Faced with higher costs and reduced fuel availability, many carriers have already cancelled thousands of flights, grounded older and less fuel‑efficient aircraft and raised fares. Markets fear further route cuts could follow.
Asia and Europe hit hardest
Asia appears to be the most affected region, traditionally absorbing the largest share of oil passing through the Strait of Hormuz. According to OilX of Energy Aspects, jet fuel and kerosene output at Asian refineries fell to 2.9 million barrels per day in April, more than 500,000 barrels per day lower than in February.
Europe is also under pressure, having seen several refineries close in recent years due to an inability to compete with larger Asian plants. About 40 per cent of the jet fuel consumed in the European Union is imported, with nearly half typically transiting through Hormuz.
Shell said European refineries are now operating at full capacity to produce aviation fuel, while Europe is increasing imports from North America and Africa. However, the International Energy Agency has warned that if Europe fails to replace more than half of lost Middle East supplies, jet fuel inventories could reach critical levels as early as June, potentially leading to actual shortages at airports and further flight cancellations.
Airlines under intense strain
Fuel is the second‑largest cost for airlines after labour, accounting for up to 30 per cent of operating expenses. Most European carriers had hedged fuel prices in advance, locking in costs for the coming months. Many US airlines, however, abandoned hedging after heavy losses during the 2008 crisis, leaving them more exposed.
American Airlines estimates it will incur more than $4 billion in additional costs this year, while British Airways owner IAG expects fuel expenses to rise by around €2 billion in 2026. Low‑cost carriers are particularly vulnerable, with Spirit Aviation Holdings collapsing earlier this month as soaring fuel prices undermined its efforts to exit bankruptcy.
Airfares surge, more cancellations ahead
Airlines are already passing much of the increased cost on to passengers through higher fares, fuel surcharges and increased fees for baggage and seat selection.
In Asia, Cathay Pacific has announced new fuel surcharges of around $350 for long‑haul international travel from mid‑May. In the United States, Kayak data show the average cost of a return international flight rose 16 per cent year on year to $1,101, while domestic fares jumped 24 per cent to $365.
Analytics firm Cirium estimates airlines have already cut summer capacity by nearly 4 per cent, removing 9.3 million seats from schedules. Lufthansa has announced the cancellation of 20,000 unprofitable short‑haul flights in Europe this summer and is even considering intermediate refuelling stops on direct routes.
While route cuts may ease pressure on jet fuel supplies, they offer little consolation to travellers facing disrupted plans. Consumer protections vary by country, with refunds, rebooking or alternative flights typically offered. Compensation depends on whether disruptions are deemed beyond airlines’ control, such as war, which can exempt carriers, although the European Commission has said that high fuel costs alone do not qualify as extraordinary circumstances. In such cases, passengers on EU flights cancelled less than 14 days before departure may be entitled to compensation of up to €600.
