Mideast conflict doubles jet fuel prices; global airlines see profits shrink

The Middle East conflict that started in late February has led to a record jump in global jet fuel prices. 

The energy markets have experienced considerable disruption due to the war in Iran, which has been in progress for more than a month now.

The price of Brent crude rose by a record 64% since the beginning of March, its biggest gain in a month. 

Record price surge and widening refined fuel spreads

Prices for oil products such as diesel and jet fuel have risen even more sharply due to the conflict in the Middle East, which has effectively shut down the Strait of Hormuz.

The Strait is responsible for 20% of the world’s oil and liquefied natural gas trade flows. 

The price of jet fuel in Rotterdam reached an unprecedented high, exceeding $1,730 per ton.

This price point signifies that the cost of jet fuel has more than doubled since the war began, whereas the price of diesel has nearly doubled over the same period.

CIF Northwest European jet fuel cargo prices were assessed by Platts, a division of S&P Global Energy, at $1,765 per ton on March 30. 

This figure is more than double the price levels seen before the conflict and significantly exceeds the 2022 peak of $1,475 per ton.

Notably, the highest recorded price was $1,774 per ton on March 19, which was three weeks after the conflict began.

The significant increase in crude oil prices was accompanied by a marked widening of crack spreads, which are the price differentials between refined oil products and crude oil.

The crack spreads for refined fuels saw a dramatic surge. The gasoil crack spread peaked at $56 per barrel. The diesel crack spread climbed even higher, reaching almost $80 per barrel, while the jet fuel crack spread exceeded $100 per barrel. 

For comparison, these spreads were significantly lower—between $20 and $30 per barrel—in February, before the war started.

Global supply deficit and revised price forecasts

The significant increase in both the absolute and relative prices of oil products stems from the supply deficit created by the conflict in Iran and the subsequent closure of the Strait of Hormuz. 

Last year, the Middle East exported approximately 3.3 million barrels of refined oil products daily, based on estimates from the International Energy Agency. 

Middle distillates account for another third of oil product exports from the Middle East.

The IEA’s monthly report indicated that last year’s total included 380,000 barrels per day of jet fuel and 730,000 barrels per day of gasoil/diesel.

Europe was the primary destination for jet fuel exports from the Gulf. Data from the IEA indicated that last year, supplies to Europe reached 280,000 barrels per day, satisfying 60% of the continent’s total import needs.

Most of the other supplies were sourced from Asia. However, this region is now also experiencing shortages, which, as demonstrated in China, have already led to export restrictions.

Commerzbank AG has raised the forecast for jet fuel prices upwards due to the ongoing conflict in the Middle East. 

Jet fuel is projected to cost $1,250 per ton by mid-year, with a subsequent decrease to $950 per ton by year-end.

“In our base-case scenario, in which we assume the war will end in late spring and therefore expect prices to fall again, diesel and jet fuel prices would still be significantly higher at the end of the year than they were before the war began,” Commerzbank analysts said. 

Meanwhile, to counter the abrupt rise in oil prices, airlines worldwide have started raising fares and reducing capacity. 

However, the industry’s continued profitability may hinge on whether consumers reduce air travel in response to rising gasoline costs that are squeezing household budgets.

Airlines respond to fuel costs

The airline industry’s projection of record $41 billion profits for 2026 is now jeopardised, according to a Reuters report. 

This shift follows the US-Israeli conflict with Iran, which began last month and caused jet fuel prices to double, compelling carriers to reassess their strategies and networks.

Several carriers, including United Airlines, Air New Zealand, and Scandinavia’s SAS, have responded to current conditions by implementing capacity reductions and raising fares; other airlines have opted to impose fuel surcharges.

Despite persistent supply-chain challenges that impacted new plane deliveries, the industry achieved a record-breaking year for global passenger traffic in 2025. This traffic rebounded significantly, reaching approximately 9% above pre-pandemic levels.

Airlines have enjoyed significant pricing power, filling more seats and capitalising on a combination of record post-pandemic travel demand and persistent supply-chain issues that limited capacity growth. 

However, the required price increases to offset the sharp surge in jet fuel costs are substantial. This comes at a challenging time, as consumers, already facing higher gasoline prices, may be forced to reduce discretionary spending, potentially curbing the recent growth in air travel.

Meanwhile, on March 31, US President Donald Trump posted on his TruthSocial account, urging nations experiencing jet fuel supply issues to purchase from American refiners or, alternatively, to “just take it” from the Middle East Gulf.

“All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the US, we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT,” Trump said.

In 2025, the US was the top source of refined products for the European market. However, S&P Global Commodities at Sea (CAS) data indicated that the US ranked significantly lower, seventh overall, as a supplier of jet fuel. 

Specifically, US refineries exported approximately 16,000 barrels per day of jet fuel to Europe last year, which represented about 3% of the total jet fuel inflows to the continent.

In 2025, the US was a net exporter of jet fuel, shipping out approximately 70,000 barrels per day more than it imported, according to analysts at S&P Global Energy CERA. The Caribbean was the primary recipient of these exports, with only comparatively small volumes being sent to Europe.

The UK was the largest purchaser of US jet fuel in 2025, according to CAS data, representing nearly 70% of all delivered volumes. Following the UK, the Netherlands was the second-biggest buyer, with Spain and Iceland also ranking among the top purchasers.

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