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Airfares are set to rise across several international routes even after a temporary ceasefire between the US and Iran eased crude oil prices below $100 a barrel, as airlines warn that jet fuel supply disruptions linked to the Strait of Hormuz could take months to normalise.
Benchmark crude slipped sharply after Donald Trump announced a conditional two-week suspension of military operations tied to reopening the Strait, which carries roughly one-fifth of global oil trade and a large share of refined fuel shipments to Asia. Brent crude fell to around $95 a barrel and West Texas Intermediate to about $97, offering short-term relief to energy markets — but not to airlines facing tight jet fuel availability.
Willie Walsh, director general of the International Air Transport Association, said refined fuel supply — especially aviation fuel — will remain constrained even if crude flows resume quickly.
“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be,” Walsh told CNBC, citing disruptions to Middle East refining capacity that supplies a significant share of global jet fuel.
The lag between crude price declines and aviation fuel availability means airlines are already adjusting fares upward across long-haul and Asia-bound routes. Jet fuel typically accounts for 20 to 30 per cent of airline operating costs, making sustained supply tightness difficult to absorb without passing increases to passengers.
Industry estimates indicate jet fuel prices in parts of Asia have nearly doubled since late February, forcing carriers to introduce fuel surcharges, reduce marginal routes and revise capacity plans ahead of the peak summer travel season. Airlines across South and Southeast Asia have been particularly affected, with import-dependent markets such as Pakistan, Myanmar and Vietnam facing the sharpest supply pressures.
About 80 per cent of Asia’s jet fuel imports transit Hormuz, making the region especially vulnerable to disruptions in Gulf refining and shipping flows. Export restrictions from China and Thailand and shipment caps imposed by South Korea have further tightened availability, reinforcing upward pressure on aviation fuel prices.
The operational impact is already visible. Indian aviation authorities estimate roughly 10,000 flights were cancelled in five weeks following the escalation in West Asia, highlighting how supply uncertainty — not just price volatility — is shaping airline scheduling decisions.
Walsh said airlines are increasingly tankering fuel from departure hubs, adding technical refuelling stops and trimming capacity to manage supply risks. These adjustments increase operating costs further and are likely to translate into higher ticket prices on long-haul routes between Asia, Europe and the Middle East.
Warren Patterson, Head of Commodities Strategy at ING, said the ceasefire has reduced the probability of an immediate supply shock but has not eliminated the geopolitical premium embedded in refined fuel markets.
Helima Croft, global head of commodity strategy at RBC Capital Markets, has warned that energy markets remain highly sensitive to any threat to Gulf export infrastructure, with refined products such as jet fuel typically experiencing longer disruptions than crude supply itself.
Airlines are responding through fuel surcharges, selective capacity reductions and route adjustments, while some carriers are carrying additional fuel on outbound flights, reducing cargo payloads and extending travel times on certain sectors. These operational shifts are already feeding into fare increases across several international corridors.
Major Gulf carriers including Emirates, Etihad Airways, flydubai and Air Arabia remain relatively resilient thanks to proximity to refining hubs and stronger logistics networks, although sustained volatility in aviation fuel supply could still weigh on margins if disruptions persist.
Despite the pressure on fares, Walsh said global demand for air travel remains strong, suggesting the industry views the current fuel shock as temporary rather than structural. The forward oil price curve points to crude potentially easing below $80 a barrel by year-end, reinforcing expectations that energy markets will stabilise gradually.
However, analysts caution that restoring crude flows alone will not immediately resolve aviation fuel shortages. Refinery output, tanker availability and export policies across Asia will take time to normalise, meaning passengers are likely to face higher ticket prices and selective flight reductions for several months even if the ceasefire holds.
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