Jet fuel prices in the United States have more than doubled in a matter of weeks, and airlines are now warning that supplies could run dry before the end of the month if Middle East tensions continue to disrupt the global energy market.
The Argus U.S. Jet Fuel Index shows prices jumped from about $2.17 per gallon to $4.56 per gallon by March 20, a surge tied directly to the ongoing U.S.-Iran conflict and slowing tanker traffic through the Strait of Hormuz.
United Airlines CEO Scott Kirby announced the carrier will cut approximately 5% of its planned flights in the near term as fuel costs spiral. Kirby warned that if prices hold at current levels, jet fuel costs alone could add $11 billion to the airline’s annual expenses. United has already suspended select international routes, including service to Israel and Dubai.
Delta Air Lines CEO Ed Bastian said the fuel spike added as much as $400 million in costs to Delta’s books in March alone. Speaking at a J.P. Morgan industrial conference, Bastian said the airline is moving quickly to pass those higher costs on to passengers through fare increases.
American Airlines is projecting a similar hit: roughly $400 million in additional first-quarter fuel expenses.
The damage extends well beyond U.S. carriers. European airline executives, including leaders from Lufthansa and Air France-KLM, warned last week that a prolonged conflict will push fares higher and strain already tight fuel supplies globally. SAS said it will cancel approximately 1,000 flights in April. Cathay Pacific and multiple Asian carriers have begun adding fuel surcharges.
The Strait of Hormuz sits at the center of the crisis. Just 21 miles wide at its narrowest point, the waterway between Iran, the United Arab Emirates, and Oman carries roughly 20 million barrels of oil per day and about one-fifth of global liquefied natural gas. Tanker traffic through the strait has slowed to a crawl.
The Middle East supplies approximately 1.1 million barrels per day of jet fuel to the world market, accounting for around 17% of global consumption, according to Jaime Brito, executive director of refining and oil products at OPIS.
Jet fuel is uniquely exposed to supply shocks. Its specialized storage requirements, thin inventories, and limited spot trading mean that even minor disruptions can trigger outsized price swings.
