Airlines are about to run out of jet fuel because of the Iran war

Airlines Are About to Face Jet Fuel Shortages Amid Iran Conflict

The summer travel season was already facing challenges, but now it could worsen. Rising airfares and fees due to the war in Iran have added to the strain, with European and Asian airlines—many reliant on imported jet fuel—threatened by a possible supply crisis. This may lead to flight cancellations and reduced schedules, disrupting travel plans.

While the U.S. isn’t immediately at risk of running out of jet fuel, global shortages are pushing prices higher. American carriers are adjusting by reducing cheap fares and less profitable routes, which in turn could inflate costs for summer travelers. Even a deal to reopen the Strait of Hormuz today might not reverse the trend, as airlines have already planned routes and set prices months ahead.

Global Fuel Supply Chains Under Pressure

Over 20% of the world’s seaborne jet-fuel supply passed through the Strait of Hormuz last year, with two-thirds heading to Europe. Asian countries, which refine most of the world’s jet fuel, now face export limits as Middle Eastern crude oil—key to their production—remains blocked. Kuwait and Bahrain, major exporters, are trapped by the strait’s closure, according to Kpler data.

“It’s going to take until at least July,” said Matt Smith, head US analyst at energy consulting firm Kpler. “And even that may be optimistic at this point.”

The U.S. remains less vulnerable, as it is the world’s largest oil producer and a top jet fuel exporter. However, disruptions elsewhere could still affect domestic prices. United Airlines, for instance, has already trimmed its schedule by about 5% for the next six months.

Financial Strains on Airlines

Jet fuel is the second-largest expense for airlines, after labor. A single-aisle jet consumes roughly 800 gallons per hour, with widebodies using even more. Last year, the four major U.S. carriers—United, American, Delta, and Southwest—spent an average of $100 million daily on fuel. These costs have surged since the war began, with Delta projecting an extra $2 billion in fuel expenses this year.

United CEO Scott Kirby warned that the company could face an additional $11 billion in fuel costs if conditions persist. Last-minute fares to popular destinations like the Caribbean have risen 74% from earlier this month, while Hawaii flights saw a 21% increase. This trend reflects airlines’ efforts to offset higher expenses.

Discount carriers, already weakened by pandemic-era challenges, are under further pressure. Spirit Airlines, for example, has filed for bankruptcy twice in 18 months. Its March financial report noted that fuel cost spikes could “immediately and substantially” harm results, potentially leading to liquidation. Fitch Ratings warned that financially fragile airlines might default or return aircraft early, reducing the availability of low-cost seats.

Major airlines are also scaling back flights, prioritizing routes that yield greater profits. With fewer seats available, remaining flights are likely to become more expensive. “There’s just no point in flying flights that can’t cover the cost of fuel,” United’s Kirby stated in a recent Bloomberg interview.