"The war is constraining oil exports and prompting major producers like Kuwait, Saudi Arabia and Iraq to scale back output as shipments face growing obstacles. Iran has attacked commercial ships across the Persian Gulf and targeted oil infrastructure in Gulf Arab nations following U.S. and Israeli strikes. The attacks have effectively halted traffic through the Strait of Hormuz, a narrow passage that carries about one-fifth of the world's oil supply."
"The volatile crude oil prices causing retail gasoline prices to swing up sharply have had the same effect on the price of jet fuel. The average price in the U.S. reached $3.99 per gallon on Friday, up from $2.50 the day before the war started two weeks ago, according to the Argus U.S. Jet Fuel Index."
"Experts say it's not a question of if airfares will go up, but when, for how long and by how much. The impact may be felt most on long-haul international routes, which burn significantly more fuel than shorter flights. Some airlines outside of the U.S. have announced fare increases or fuel surcharges in an effort to offset the growing expense."
Jet fuel prices are rising sharply due to Middle East conflict disrupting global oil supplies. The war constrains oil exports from major producers like Kuwait, Saudi Arabia, and Iraq, while Iran's attacks on commercial ships and oil infrastructure have halted traffic through the Strait of Hormuz, which carries one-fifth of world oil supply. U.S. jet fuel prices reached $3.99 per gallon, up from $2.50 before the conflict began. Airlines face mounting costs as the busy summer travel season approaches. Long-haul international routes, which consume significantly more fuel, will experience the greatest impact. Some airlines have announced fare increases and fuel surcharges. United Airlines CEO warned that airfare increases will begin soon as fuel costs propagate through the industry. Airlines using fuel hedging strategies have partial protection from price spikes.
Read at Fortune
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