The US and Israeli attack on Iran on 28 February 2026, followed by Iran’s retaliatory strikes, has closed the Strait of Hormuz, through which nearly 25% of global jet fuel exports transit. This conflict has driven sharp increases in jet fuel prices worldwide.
The US Energy Information Administration (EIA) revised its Short-Term Energy Outlook on Tuesday, projecting US jet fuel to average $2.67 per US gallon in 2026, a 37% increase from last month’s $1.95 forecast, and $2.28 per US gallon in 2027, up 15% from $1.97. The Argus US jet fuel index, averaging spot prices across the US, reached a three-year high near $4 per US gallon last week and stands at $3.65 per US gallon currently, up 7% year-over-year.
Globally, jet fuel prices surged from $85-$90 per barrel pre-conflict to $150-$200 per barrel. The Platts Global Index settled at 414.07 cents per gallon ($173.91 per barrel) on 9 March, nearly double the pre-conflict $87-$91 per barrel average, with the jet-crude crack spread compressing to $74.95 per barrel, or 3.7 times the historical norm.
Airlines responded swiftly. Qantas Airways, SAS, and Air New Zealand announced fare hikes and fuel surcharges. SAS implemented a temporary price adjustment, stating increases of this magnitude require action for stable operations. Finnair warned of potential fuel availability issues if the crisis prolongs. US carriers, largely unhedged, face direct cost pass-through via higher fares, while European airlines grapple with added Sustainable Aviation Fuel mandates, now 3-4 times costlier against doubled baseline prices.
Fuel, comprising 30-38% of airline operating costs, pressures profitability. US refiners plan 1.83 million barrels per day output in 2026, up 80,000 barrels per day, with consumption at 1.74 million barrels per day. Asia-Pacific refiners cut rates amid feedstock shortages, halting exports to secure domestic supply.