As the war in Iran spreads to other parts of the Middle East, energy experts expect the price of several oil and gas products to soar in the coming months, driven by shortages. This is likely to affect flight prices, with several airlines warning of expected price increases. It could lead to a drop in travel as consumers wait for prices to drop again.
Australia’s Qantas Airways, Scandinavia’s SAS and Air New Zealand are three of the airlines that have already announced airfare increases in response to the ongoing conflict in the Middle East. The airlines cited the steep rise in fuel costs driven by the US and Israeli attack on Iran as the reason for the move.
Jet fuel prices rose from $85 to $90 per barrel before the Iran attack to $150 to $200 per barrel this week. This has led several airlines to reconsider their financial outlook for 2026, as uncertainty makes it impossible to predict where the price of fossil fuels will go in the coming months.
The war in Iran has led to the closure of the Strait of Hormuz, a key trade corridor connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. The strait is considered a bottleneck, as there are few alternative options for transporting energy beyond some limited pipeline networks in the region. The drastic reduction in fossil fuel transportation across the strait, which is said to have created the largest oil supply disruption in history, has sent oil and gas prices sharply higher in recent weeks.
A SAS spokesperson told Reuters: “Increases of this magnitude make it necessary to react to maintain stable and reliable operations,” adding that the airline has implemented a “temporary price adjustment.”
Some airlines will be affected more than others by rising jet fuel prices. For example, several Asian and European airlines, such as Lufthansa and Ryanair, are oil-hedged, meaning that a portion of their fuel supplies are kept at a fixed rate. However, some companies are concerned that even covered fuel reserves could be at risk.
Finnair covered more than 80 percent of its first-quarter fuel purchases and now fears fuel will no longer be available if the conflict continues. Some major jet fuel producers, such as Kuwait, have already been forced to reduce production and export quantities in recent weeks.
Another challenge that is driving up airfares is the closure of several airspaces due to the ongoing conflict, which has affected several routes between Asia and Europe. Some airlines have been forced to open alternative flight routes for passengers to reach their destinations. Pilots have also been forced to reroute to avoid conflict in the Middle East, while capacity on popular routes has increased rapidly.