Jet fuel costs surge as Iran conflict disrupts global aviation

AIRLINES across the world are beginning to raise ticket prices as the escalating conflict involving Iran pushes jet fuel costs sharply higher and disrupts critical energy routes.

Carriers such as Qantas Airways, Scandinavian Airlines (SAS), and Air New Zealand have already announced fare increases, citing the sudden spike in fuel costs linked to the U.S.–Israel strikes on Iran and the resulting instability across the Middle East, Oilprice.com noted.

Jet fuel prices have surged dramatically, climbing from about $85–$90 per barrel before the attacks to between $150 and $200 per barrel last week. The sharp rise has forced several airlines to reassess their financial projections for 2026 as uncertainty over global fuel supply deepens.

Driver of disruption

A key driver of the surge is the disruption of shipping through the Strait of Hormuz, one of the world’s most important energy transit corridors. The strait connects the Persian Gulf to global markets, and limited alternatives for transporting oil mean any disruption quickly tightens supply. The closure of the waterway has sharply reduced the movement of fossil fuels, contributing to what analysts describe as one of the most severe oil supply disruptions in history.

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An SAS spokesperson told Reuters that the surge in fuel costs had made a pricing response unavoidable, noting that the airline had introduced a ‘temporary price adjustment’ to maintain operational stability.

The impact of higher fuel prices varies among carriers. Airlines such as Lufthansa and Ryanair have partially shielded themselves through fuel hedging strategies that lock in supply at pre-agreed prices. However, even these safeguards may not fully protect airlines if the conflict drags on and supply disruptions intensify.

Finnair, for example, hedged more than 80 percent of its fuel needs for the first quarter but now fears that even contracted supplies could be affected if production and exports continue to decline. Some producers in the region, including Kuwait, have already reduced output and shipments in recent weeks.

Nigerian airlines are yet to raise fares as some of them protected themselves via hedging like Lufthansa and Ryanair, shielding consumers from fares inflation. As at Sunday, Air Peace flights to Lagos from Abuja on Tuesday went from N90,600 (economy) to N335,000 (business).

Airlines are also dealing with operational disruptions beyond fuel costs. Several airspaces across the Middle East have been closed because of the conflict, forcing carriers to reroute flights between Asia and Europe. Longer routes, combined with congestion on alternative paths, are increasing costs and limiting available capacity.

Analysts at Deutsche Bank warned that if the crisis persists without relief, airlines could face severe operational strain. In a note to clients, the bank’s analysts said the industry might be forced to ground thousands of aircraft, with financially weaker carriers potentially suspending operations altogether.

Some airlines remain cautious but have not yet raised fares. British Airways said it expects to maintain current ticket prices in the near term while monitoring developments, although it has already cancelled certain routes, including seasonal services to Abu Dhabi, due to the uncertainty.

Financial markets’ impact

The turbulence has also spilled over into financial markets. Airline shares across Asia, Europe, and North America have declined amid fears that rising ticket prices could dampen demand. Director of Equity Research for Asia at Morningstar, Lorraine Tan, warned that travel demand could weaken as higher costs discourage leisure travel and companies cut back on business trips.

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Meanwhile, the geopolitical outlook remains unclear. Speaking at a political event in Florida, U.S. President Donald Trump said the United States had “already won in many ways” in the conflict with Iran but vowed to continue pursuing what he described as ‘ultimate victory.’ His remarks, alongside conflicting signals from Washington, have added to the uncertainty surrounding how long the conflict might last.

The war has already disrupted energy supply chains across the Middle East, driving oil and gas prices higher and triggering market volatility. With no clear end to the crisis, analysts expect airlines to face sustained pressure — and travellers may see higher airfares in the months ahead.