Jet fuel prices in the U.S. have more than doubled in recent weeks, rising from approximately $2.17 to $4.56 per gallon by March 20, as reported by the Argus U.S. Jet Fuel Index [1]. This surge is attributed to escalating tensions in the Middle East, which have squeezed supply and raised concerns among airlines that inventories could run dry within weeks [1]. United Airlines CEO Scott Kirby announced that the carrier will cut about 5% of planned flights in the near term due to the spike in fuel costs, warning that if prices persist, jet fuel alone could add $11 billion in annual expenses [1]. United is also scaling back service during off-peak periods and suspending select international routes, including Israel and Dubai, citing the ongoing conflict [1].
Delta Air Lines CEO Ed Bastian stated at a J.P. Morgan industrial conference that the jet fuel spike added as much as $400 million in costs in March alone, and airlines are moving quickly to pass those higher costs on through fare increases [1]. American Airlines expects fuel to add about $400 million to its first-quarter expenses [1]. The impact is not limited to U.S. carriers; European airline executives from Lufthansa and Air France-KLM warned that a prolonged conflict in the Middle East will push fares higher and strain already tight fuel supplies, with some cautioning that jet fuel could run out if disruptions persist [1]. Air France-KLM plans to raise long-haul ticket prices, Cathay Pacific and several Asian carriers are increasing fuel surcharges, SAS will cancel about 1,000 flights in April due to rising costs, and Qantas and Thai Airways are also adjusting fares and schedules [1].
Jet fuel is one of airlines’ largest expenses and is particularly volatile due to thin inventories, specialized storage, and limited spot trading, which can amplify price swings when supply tightens [1]. The sensitivity of the market is heightened as traders monitor the Strait of Hormuz, a critical energy choke point where tanker traffic has slowed amid regional tensions [1]. The Strait of Hormuz, just 21 miles wide at its narrowest, carries roughly 20 million barrels of oil per day and about one-fifth of global liquefied natural gas, along with significant volumes of jet fuel [1]. The Middle East exports about 1.1 million barrels per day of jet fuel, accounting for roughly 17% of global consumption, according to Jaime Brito, executive director of refining and oil products at OPIS [1]. With supplies already stretched, even minor disruptions could quickly tighten the market and exacerbate the situation [1].
CONCLUSION
Jet fuel prices have surged dramatically due to Middle East tensions, prompting airlines worldwide to cut flights, raise fares, and warn of potential supply shortages. The market impact is high, with both U.S. and international carriers facing significant cost increases and operational adjustments. If disruptions persist, further price hikes and flight cancellations are likely, intensifying pressure on the aviation sector.