"If [the Strait of Hormuz] 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 given the disruption to the refining capacity in the Middle East."
"Although there's strategic reserves of crude, which can soften the blow of production disruptions, the same strategic reserves do not exist for jet fuel."
"Airline CEOs including Delta's Ed Bastian and United Airlines's Scott Kirby said the conflict has increased operating costs by about $400 million, respectively."
"United increasing luggage check costs by $10, its first change in bag fees in two years, and AirAsia X increasing airfares by up 40% and fuel surcharges by 20%."
The Iran war has led to a 70% increase in oil prices, affecting jet fuel costs, which constitute 27% of airline operating budgets. A tentative ceasefire may allow the reopening of the Strait of Hormuz, but refining capacity issues in the Middle East will delay a return to pre-conflict jet fuel prices. Global refining capacity has decreased by 10% to 12%, halting over 2 million barrels per day. Airlines are responding with increased fees and surcharges to manage rising costs, which have added approximately $400 million to operating expenses.
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