Global Airlines Cancel Flights as Jet Fuel Prices Surge Past $195 Due to US-Israel War on Iran

Major airlines are grounding flights at an accelerating pace as jet fuel prices skyrocket to unprecedented levels, with the U.S.-Israel war against Iran squeezing global oil supplies and disrupting critical supply chains. Jet fuel—a specialized derivative of crude oil used exclusively by commercial and cargo aircraft—hit $195 per barrel at the end of March, nearly doubling from $100 per barrel just before the war escalated in late February. The shortage has forced carriers from Air New Zealand to Lufthansa to implement aggressive route reductions, with industry analysts warning that the crisis will intensify in April and May as inventories dwindle and geopolitical tensions show no signs of abating.

The aviation industry, already grappling with the aftermath of the COVID-19 pandemic and labor shortages, now faces a dual threat: sharply rising operational costs and diminishing access to a vital resource. With oil production flows disrupted in the Middle East and storage facilities overflowing with crude that cannot be easily refined into jet fuel, airlines are scrambling to adjust schedules, hike ticket prices, or suspend service entirely. The International Energy Agency (IEA) has forecasted that April’s oil supply loss will be twice that of March, exacerbating a supply crunch that experts say could ripple across continents—starting in Asia and spreading to Europe by mid-year.

Why the US-Israel War on Iran Is Disrupting Jet Fuel Markets

The escalation of military conflict between the United States, Israel, and Iran has triggered a supply shock in global oil markets, with profound implications for the aviation sector. Iran, a key oil producer with the world’s fourth-largest crude reserves, has seen its exports severely restricted by Western sanctions and military targeting of its energy infrastructure. Meanwhile, regional instability has prompted Gulf states to withhold oil from global markets, reducing the availability of light, sweet crude—ideal for producing jet fuel—while pushing up prices across the board. According to data from Argus Media, a leading energy analytics firm, the United Kingdom is now the most exposed European nation to tightening jet fuel and diesel supplies, with refineries struggling to pivot from gasoline and diesel production to jet fuel due to technical and logistical constraints.

The Refining Bottleneck: Why Jet Fuel Is Harder to Store and Produce

Jet fuel, also known as aviation turbine fuel (ATF), is not a simple byproduct of oil refining. Unlike gasoline or diesel, it requires specialized processing at facilities equipped with hydrocracking units that can break down heavy crude into lighter, cleaner-burning fuels suitable for aircraft engines. These units are in limited supply globally, and many refineries in Europe and Asia lack the flexibility to rapidly switch production lines to meet surging jet fuel demand. "Jet fuel requires specialized storage and handling," explains June Goh, senior oil market analyst at Sparta Commodities, in a recent analysis posted on social media platform X. "There is far less stored jet fuel than gasoline because it’s more expensive to produce and maintain, and airlines typically rely on just-in-time delivery. When supply chains break down, the system has no buffer."

The IEA’s executive director, Fatih Birol, reinforced this warning during a podcast interview, stating that April’s oil supply loss would be double March’s, with jet fuel and diesel inventories particularly vulnerable. "We are seeing that in Asia, but soon, I think, in April or May, it would come to Europe," he said. The agency’s projections underscore a growing divergence between crude oil prices—now hovering above $100 per barrel—and the availability of refined jet fuel, which is trading at a historic premium due to scarcity.

Which Airlines Are Cutting Flights—and Why It Matters

The fallout from the jet fuel crisis is already visible across the aviation industry, with airlines in North America, Europe, and Asia announcing flight cancellations, route reductions, and temporary price hikes. While some carriers like Delta Air Lines have avoided drastic cuts thanks to in-house refining capacity, others are making sweeping adjustments to cope with the financial strain. Experts warn that continued disruptions could lead to broader economic ripple effects, including higher ticket prices for consumers, reduced tourism, and potential job losses in the aviation sector.

Europe: Ryanair, Lufthansa, and SAS Lead Route Reductions

Ryanair, Europe’s largest airline by passenger volume, has warned that it may reduce routes if the war persists. Speaking to Sky News, CEO Michael O’Leary cautioned that while no disruptions are expected until early May, a prolonged conflict could threaten jet fuel supply in Europe during peak travel months. "We don’t expect any disruption until early May, but if the war continues, we do run the risk of supply disruptions in Europe in May and June," O’Leary said. The airline, known for its aggressive cost-cutting and expansion model, is evaluating which routes may become unprofitable at current fuel prices, which have surged by nearly 50% since February.

Germany’s flagship carrier, Lufthansa, is taking more concrete steps. A company spokesperson told Bloomberg that the airline is developing crisis response plans and could ground up to 40 aircraft—roughly 10% of its fleet—if the shortage worsens. The move reflects a broader trend among European legacy carriers, which are facing pressure from low-cost competitors while contending with soaring operational costs. Scandinavian Airlines (SAS) has also announced plans to cut about 1,000 flights due to the surge in jet fuel costs, according to a report in The Wall Street Journal. Most of the cancellations will affect short-haul routes in the Nordic region, where multiple flights per day operate, allowing the airline to rebook passengers with minimal disruption. "The sharp increase in fuel costs is affecting the entire European aviation system," a SAS spokesperson said in March. In addition to flight cuts, SAS has implemented temporary fare increases to offset the higher fuel expenses.

North America: United and Delta Take Divergent Paths

United Airlines has become one of the most vocal U.S. carriers in addressing the crisis head-on. In a memo to employees posted on the airline’s internal website, CEO Scott Kirby outlined plans to reduce flying over the next two quarters by canceling off-peak flights and overnight red-eye services. "In the short term, that means tactically pruning flying that's temporarily unprofitable in the face of high oil prices," Kirby wrote. The airline estimates that sustained high fuel prices could add an additional $11 billion to its annual jet fuel expenses. For context, Kirby noted that United’s highest annual profit in history was less than $5 billion. "If prices stayed at this level, it would mean an extra $11 billion in annual expense just for jet fuel."

Delta Air Lines, however, has taken a different approach. While the airline has not announced widespread flight cancellations, it is trimming its seasonal Los Angeles to Anchorage route this summer. Delta attributes the change to "adjusting its schedule to align with customer demand," but industry analysts suggest the move may also reflect fuel cost pressures. Delta benefits from a strategic advantage: it owns an oil refinery in Trainer, Pennsylvania, which provides a partial hedge against rising fuel prices. "It’s not going to cover the crack entirely, but gives us a fairly significant hedge," Delta CEO Ed Bastian told investors at a March conference hosted by JPMorgan Chase. The refinery, acquired in 2012, processes about 180,000 barrels of oil per day and supplies a portion of Delta’s jet fuel needs, though analysts caution that it cannot fully insulate the airline from global price shocks.

Asia-Pacific: Air New Zealand and Vietnamese Carriers Cut Capacity

In the Asia-Pacific region, where jet fuel prices have risen more than 40% since the start of the year, airlines are responding with immediate capacity reductions. Air New Zealand announced in March that it would cut approximately 5% of its flights—about 1,100 departures—starting in early May. The cuts will focus on off-peak hours and routes where alternative transportation options exist, allowing the airline to consolidate passengers onto fewer flights. "We're focused on consolidating flights that are off-peak flying hours, for example, or where there is an alternative that we can re-accommodate customers," said Nikhil Ravishankar, Air New Zealand’s CEO, in an interview with 1News.

Vietnam’s aviation sector, which has seen rapid growth in recent years, is also feeling the squeeze. Vietnam Airlines, the country’s largest carrier, suspended seven domestic flight routes on April 1 and plans to slash monthly flight volume by 10% to 20% over the next quarter if jet fuel prices reach $160 to $200 per barrel—a scenario analysts say is increasingly likely. Local competitors Vietjet Air and Bamboo Airways have announced similar reductions, with some routes temporarily suspended. The Vietnamese government has urged airlines to adapt, but the sector’s heavy reliance on imported jet fuel—Vietnam produces little of its own crude—leaves it particularly vulnerable to global price swings. "Travel has gotten a lot more expensive in Asia, with many airlines adding fuel surcharges or downright canceling flights," Goh of Sparta Commodities wrote on X. "Europe is facing imminent jet fuel supply shortages. Brace yourselves."

The Broader Economic Impact: What’s at Stake for Travelers and Economies

The aviation industry is a vital artery of the global economy, transporting over 4.5 billion passengers and 60 million tons of cargo annually. When fuel costs rise and flights are canceled, the consequences extend far beyond airline balance sheets. Tourism-dependent economies, such as those in Southeast Asia, the Caribbean, and parts of Europe, are bracing for a sharp decline in visitor arrivals, which could ripple through local businesses, hotels, and hospitality sectors. Airlines themselves face a profitability squeeze, with profit margins already thin after years of pandemic losses and rising labor costs. "For an industry that operates on razor-thin margins, every dollar increase in fuel prices erodes profitability significantly," says Robert Mann, an airline industry consultant and former airline executive. "When fuel accounts for 30% or more of operating costs, even modest price hikes can force painful decisions like route cancellations or layoffs."

Consumers are also feeling the pinch. Airlines are passing along higher fuel costs through surcharges and higher base fares, making air travel less affordable for families and businesses. The U.S. Bureau of Labor Statistics reported that airline fares rose by 12.5% year-over-year in February, the largest increase since 1980, with further hikes expected in the coming months. In Europe, where jet fuel prices have surged by over 80% since the start of the year, carriers are implementing fuel surcharges of $20 to $50 per ticket on long-haul routes. Low-cost carriers, which typically pass fuel costs directly to consumers, are particularly exposed. Ryanair, for example, has already warned of potential fare increases if the conflict persists.

Geopolitical Risks: Could the Crisis Worsen?

The current jet fuel shortage is a direct result of geopolitical instability in the Middle East, where Iran’s oil exports have plummeted due to sanctions and military targeting, and regional producers are reluctant to increase output amid fears of escalation. Iran, which produces about 2.5 million barrels of crude per day, has seen its exports drop by roughly 1 million barrels since the war began, according to estimates from the U.S. Energy Information Administration (EIA). Meanwhile, Saudi Arabia and other Gulf states have signaled they will not unilaterally increase production to stabilize markets, citing concerns over global demand and the need to conserve reserves.

Analysts at Goldman Sachs have warned that if the conflict escalates further—particularly if Iran blocks the Strait of Hormuz, a critical chokepoint for global oil shipments—jet fuel prices could surge past $250 per barrel. Such a scenario would trigger widespread flight cancellations across multiple continents, as airlines prioritize fuel for long-haul routes and ground short-haul services altogether. "The market is underestimating the tail risk of a broader regional conflict," said Damien Courvalin, head of energy research at Goldman Sachs, in a note to clients. "If the Strait of Hormuz is threatened, we’re looking at a full-blown energy crisis, not just a jet fuel shortage."

Key Takeaways: What Travelers and Businesses Need to Know

• Jet fuel prices have surged to $195 per barrel—nearly double pre-war levels—due to disruptions from the U.S.-Israel war on Iran, tightening global supply chains and triggering flight cancellations across multiple continents.
• Airlines including United, Ryanair, Lufthansa, and Air New Zealand have announced route reductions, cancellations, or temporary fare hikes, with more cuts expected if the conflict persists into peak travel season.
• Europe and Asia are the most exposed regions to jet fuel shortages, with the U.K. identified as the most vulnerable country in Europe due to limited refining flexibility and reliance on Middle Eastern crude imports.
• Airlines with in-house refineries, like Delta, have a temporary advantage, but even they face pressure as global fuel prices remain elevated and refining bottlenecks persist.
• The crisis threatens to ripple through the broader economy, increasing travel costs for consumers, reducing tourism revenue, and potentially leading to job cuts in the aviation sector.

Frequently Asked Questions About the Jet Fuel Shortage and Airline Cancellations