Jet fuel prices have more than doubled since Operation Epic Fury began on February 28, 2026, surging from $96 a barrel to $197 due to the near-total closure of the Strait of Hormuz and Persian Gulf refinery losses. Northwest European jet fuel reached a record $1,840 per metric ton on April 3, 2026, with fuel comprising 20% to 35% of airline operating costs, rendering many pre-conflict flights unprofitable.
Hedging strategies determine the uneven impact. European airlines entered strongest, averaging 80% coverage for 2026 at pre-crisis rates, though protection thins later. Ryanair secured 84% of current quarter fuel at $77 per barrel and 80% for next year at $67, despite supply risks. Lufthansa holds 82% for the quarter and 77% for the year, pausing new hedges. IAG covers 60-70%, easyJet 84% for first half at $715 per ton, Wizz Air 83% for current year, and Finnair 70-95% near-term. Norwegian hedged 45% for 2026, SAS 0%, leading to nearly 1,000 April cancellations, while AirBaltic’s 6% coverage prompted a €30 million emergency loan and suspended IPO.
US carriers like Delta, American, United, and recently Southwest abandoned hedging a decade ago, facing full exposure; shares fell 4.6-6.6% on April 2. Delta’s Trainer refinery offers partial relief. United cut 5% of flights.
In Asia-Pacific, Qantas hedged 81%, Singapore Airlines up to five years out, but Cathay Pacific only 30% through mid-2026, suspending Middle East services. China Eastern has no hedges; Vietnam Airlines cut 23 weekly flights amid shortages.
Crude hedges fail to fully shield against jet fuel’s doubled rise versus crude’s 33% gain, with refining margins hitting $144 per barrel. Many pause new hedges, betting on de-escalation.