THE surge in fuel prices because of the conflict in Iran is starting to put significant pressure on airlines, truckers and the public.
The conflict has effectively frozen shipments through the Strait of Hormuz, a conduit for about one-fifth of the world’s oil.
US President Donald Trump’s statement recently that the conflict would soon end sent oil prices down, but they remain a lot higher than they were before the United States and Israel started attacking Iran on Feb 28. If these higher fuel prices persist for weeks or months, airlines, truckers, shipping companies and other businesses will be forced to pass on some of those costs to their customers, causing more widespread economic pain.
The price of jet fuel appears to have risen the most, according to Matthew Kohlman, who focuses on oil product prices in the Americas for Platts, part of S&P Global.
“While crude, gasoline and diesel have spiked considerably, they have not approached or broken record highs like the jet fuel markets,” he said in a statement.
The last time jet fuel prices approached or exceeded the current highs was in 2022, shortly after Russia invaded Ukraine.
The closure of the Strait of Hormuz, on Iran’s southern coast, is particularly troubling for Europe, which became more reliant on jet fuel imports as some of its refineries closed in recent years, said Amaar Khan, European head of jet fuel pricing for Argus Media.
About half the continent’s jet fuel imports come from the Middle East.
“That is an incredibly large amount of supply that is now in danger, and it’s very unlikely that we’ll be able to recover those volumes from other areas of the world, especially when we consider the Americas and Asia-Pacific are now looking to safeguard their own supply,” he said.
Many European airlines are at least somewhat protected from rising costs because they lock in fuel prices through the use of futures contracts and other hedging techniques.
Many US carriers, however, do not use hedges and may be more vulnerable to surging fuel prices.
The chief executive of United Airlines, Scott Kirby, said at an event that higher fuel prices would have a “meaningful” impact on the company’s financial results in the first quarter of the year, according to CNBC.
The conflict has also contributed to a rise in gasoline prices.
The average price of US gasoline reached US$3.54 a gallon on March 10, according to the AAA motor club. That is a 19% increase since the first US-Israeli attacks on Iran on Feb 28. Gas hasn’t been at these levels since 2024.
As of November, the cost of crude oil accounted for about 50% of the price of a gallon of regular gasoline in the United States, according to the Energy Information Administration.
When fuel prices go up, consumers feel it at the pump and when higher transportation costs raise the prices of other goods like food and clothes.
“Because oil is pretty cheap to move around, every barrel of oil competes with every other barrel of oil in the world,” said Christopher Knittel, associate dean for climate and sustainability at Massachusetts Institute of Technology.
Since Feb 28, the average cost of diesel, used to fuel trucks, has risen by more than a dollar, or 27%, to US$4.78 a gallon, according to AAA.
Truckers typically pass on at least some of the higher fuel costs to retailers, restaurants and other customers. And those companies will most likely pass on a portion of higher trucking rates to consumers.
Jason Miller, a professor of supply chain management at Michigan State University, said the recent jump in the diesel price “would meaningfully affect shippers’ freight bills” but added that the increase would vary across the trucking sector.
The cost of shipping containers across the ocean has fallen this year, but ocean carriers have recently announced that fuel surcharges will be imposed.
On March 10, China’s Ministry of Transportation said it had held talks with officials from Maersk and MSC, two large European shipping lines, about their international shipping operations. It did not elaborate, and Maersk and MSC did not immediately comment about the talks.
Many European airlines are also somewhat protected from rising costs because they hedge fuel prices.
Lufthansa Group, which owns its namesake airline and several others, said that it had hedges covering about 82% of the fuel needs of its passenger airlines for the rest of the year.
Air France-KLM said last month that it had increased its fuel hedging substantially, covering nearly 90% of the fuel it uses in a year.
“I think this is giving us robustness in this very, let’s say, dynamic world,” said Steve Zaat, Air France-KLM’s chief financial officer.
Hedging allows airlines to better plan for fuel costs, one of their biggest expenses.
But airlines generally hedge only some fuel costs, and the practice does not perfectly offset price hikes, according to Khan of Argus.
In the United States, airlines generally abandoned hedging years ago, with executives saying that the practice was too expensive and worked poorly when fuel costs were low or falling. Fuel typically accounts for about 20% to 30% of an airline’s operating costs, experts said.
Airlines may have to absorb rising fuel costs for now because tickets for flights in the coming weeks have mostly been sold.
For flights further out, carriers could raise fares across the board, but they may opt for other options, said John Strickland, an aviation industry consultant. — ©2026 The New York Times Company
This article originally appeared in The New York Times
