Jet Fuel Prices Double Amid Iran War, Prompting Airlines to Cut Two Million Seats

Airlines have slashed about two million seats from their May 2026 schedules over the past two weeks, responding to jet fuel shortages triggered by the Iran war that began on February 28, 2026. The Strait of Hormuz remains effectively closed, disrupting supplies from the Gulf region, which produces about one fifth of the fuel traded on international markets.

Jet fuel prices have doubled since the conflict started, pushing carriers to consolidate flights and raise fares.

The UK stands as the largest net importer of jet fuel in Europe, with high reliance on imports, poor refining capacity, and low stocks, according to Goldman Sachs. The country holds no strategic reserves, leaving commercial inventories as the sole buffer against disruptions.

Goldman Sachs analysts noted that these factors make the UK most exposed, with inventories potentially falling to critically low levels and increasing the likelihood of rationing measures.

Fuel accounts for up to a quarter of operating expenses for airlines, amplifying the impact of the shortages. IAG, the owner of British Airways, stated that it will raise ticket prices to reflect higher fuel costs. IAG added that despite its hedges, it was not immune to the broader fallout from fuel cost volatility.

4 billion increase in its jet fuel bill this year due to the price surge. These adjustments come as airlines compete for fuel produced outside the Gulf, further driving up costs.