Middle East Conflict Sends Jet Fuel Prices Soaring Again
US airlines are facing another round of soaring jet fuel costs due to the renewed conflict in the Middle East. The US-Iran 'deal to make a deal' collapsed, sending Brent crude oil prices above $100 per barrel again.
The global markets have been tightening since March, with peak seasonal demand during the summer holiday travel exacerbating price spikes. US jet fuel exports reached record highs this month as refining margins soared with crude supply still constrained at the Strait of Hormuz.
This has resulted in spiking fuel costs that depress airline earnings and raise air fares for consumers. Southwest Airlines chartered a vessel to ship 12.6 million gallons of jet fuel from Houston to Los Angeles via the Panama Canal, which arrived in late May thanks to a waiver of the Jones Act.
The collapse of the US-Iran memorandum of understanding and the end of the ceasefire have reignited crude and fuel price rallies, further increasing airline fuel costs. All US carriers have revised down their 2026 earnings expectations due to the higher fuel expense, which has become one of their biggest expenses.