As the war in Iran spreads to other parts of the Middle East, energy experts expect the price of many oil and gas products to rise in the coming months, driven by shortages. This could affect flight prices, with several airlines warning of expected price increases. It could lead to a drop in travel, as consumers expect prices to drop again.
Australia’s Qantas Airways, Scandinavia’s SAS, and Air New Zealand are three airlines that have already announced flight increases in response to the ongoing conflict in the Middle East. Airlines cited rising fuel costs driven by the US-Israeli invasion of Iran as the reason for this.
Jet fuel prices have risen from between $85 to $90 a barrel before the Iran attack to as high as $150 to $200 a barrel this week. This has led several airlines to reconsider their financial outlook for 2026, as the uncertainty makes it difficult to predict where the price of fossil fuels will go in the coming months.
The Iran war has led to the closure of the Strait of Hormuz, an important trade corridor that connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait is considered an outlet, as there are few other ways to transport energy, beyond the limited networks of pipelines in the region. The dramatic reduction in fossil fuel shipments through the strait, said to have caused the largest oil supply disruption in history, has driven up oil and gas prices in recent weeks.
A SAS spokesman told Reuters, “This increase in growth necessitates a response to maintain stable and reliable operations,” adding that the airline has made “temporary price adjustments.”
Some airlines will be more affected than others by the increase in jet fuel prices. For example, several airlines in Asia and Europe, such as Lufthansa and Ryanair, have oil hedging in place, which means that part of their fuel inventory is kept at a fixed amount. However, some companies are concerned that even fenced fuel reserves may be at risk.
Finnair has hedged more than 80 percent of its first-quarter fuel purchases and is now worried that fuel may run out if the dispute continues. Some major jet fuel producers, such as Kuwait, have already been forced to cut production and exports in recent weeks.
Another challenge that increases the prices of flights is the closure of several airports due to the ongoing conflict, which has affected several routes in Asia-Europe. Some airlines have been forced to open other flight routes so that passengers can reach their destinations. Pilots were also forced to change routes to avoid the Middle East conflict, while capacity on popular routes increased rapidly.
“With no immediate relief, airlines around the world could be forced to ground thousands of planes while some of the industry’s biggest carriers could halt operations,” Deutsche analysts are reported to have said in a note to clients.
Meanwhile, other companies, such as British Airways, are hoping to maintain their current ticket prices in the near term until more is known about the medium and long-term impact of the conflict. However, British Airways has cut some routes due to the ongoing uncertainty, such as its seasonal flights to Abu Dhabi.
The uncertainty means that several airlines, across Asia, Europe, and North America, are seeing their shares drop. Lorraine Tan, director of equity research, Asia at Morningstar, said, “The problem for airlines now is that demand for travel can be reduced as costs become prohibitive for leisure travelers and as some companies begin to limit business travel due to an uncertain outlook.”
On Monday, during a party conference in Florida, US President Trump declared, “We’ve won in many ways, but we haven’t won enough,” referring to the war in Iran. Trump says. The president added, “We are moving forward more determined to achieve a victory that will end this long-standing crisis once and for all.” Trump’s speech, as well as mixed messages from the president to other media outlets, have created a lot of uncertainty, as there is no clear timeline for the conflict or an idea of when it might end.
The ongoing conflict in the Middle East has already caused major disruptions in energy supplies, driving up oil and gas prices. Meanwhile, uncertainty about when the US-Israeli intervention in Iran will end has led to a sharp decline in shares of the industrial chain. While many airlines are trying to weather the storm, it is likely that we will see a significant increase in airfares in the coming months.
By Felicity Bradstock of Oilprice.com
More Top Reads at Oilprice.com
Oilprice Intelligence brings you signals before they become front page news. This is the same expert analysis read by seasoned traders and political consultants. Get it for free, twice a week, and you’ll always know why the market is moving ahead of everyone else.
You get geopolitical intelligence, hidden inventory data, and market gossip that moves billions – and we’ll send you $389 of premium energy intelligence, from us, just for signing up. Join 400,000+ readers today. Get instant access by clicking here.
