US jet fuel costs surge as Iran tensions raise Strait of Hormuz disruption fears

Jet fuel prices in the United States have risen sharply as tensions between the United States and Iran intensify, adding fresh pressure to airlines ahead of the peak summer travel season. The latest market move is being linked to fears that shipping through the Strait of Hormuz could be disrupted. That waterway is a key route for global energy shipments, so even the prospect of interference can affect fuel markets quickly.

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The International Air Transport Association said jet fuel availability is threatened and that prices have roughly doubled since late February. In its annual report published on Sunday, the group said the airline industry's combined net profit for 2026 is now expected to be $23bn, down from a previous projection of about $41bn and below $45bn in 2025. It also said the sector's profit margin would be the weakest since the COVID years.

US Department of Transportation data released on Monday showed fuel costs surged by 78 percent to nearly $6.5bn in April, after a 26 percent jump in March. The cost per gallon rose by $1.81 from the same period last year to $4.11. Airfares in the United States have also increased, with the Bureau of Labor Statistics recording a 5.5 percent rise since the war began, including gains of 2.7 percent in March and 2.8 percent in April.

The price spike matters because fuel is one of the largest costs for airlines, and the timing coincides with the busiest travel period in the United States. The association represents more than 370 airlines and about 85 percent of global air traffic, so its outlook is closely watched across the industry. Higher fuel costs can feed through to ticket prices, route cuts and weaker profits, especially for carriers already under pressure.

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The disruption is also significant because it comes against the backdrop of a wider confrontation in the Gulf. The Strait of Hormuz has already been at the centre of military tensions, with recent reports of drone interceptions, missile launches and strikes on radar sites in the area. That has reinforced concern among airlines, insurers and energy traders that the conflict could spill further into commercial shipping and aviation costs.

The impact is already being felt by individual carriers. Spirit Airlines ceased operations in early May after three decades in service, and court filings said surging fuel prices contributed to its collapse. United Airlines chief executive Scott Kirby said in April that the Chicago-based carrier would need to raise prices by up to 20 percent, while American Airlines later announced temporary suspensions of some flights because of soaring costs.

What remains unclear is whether fuel prices will keep rising, how long the pressure on airlines will last, and whether any further escalation around the Strait of Hormuz will affect supply more directly.

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