Jet fuel supply fears grow as Iran war continues, airlines cut flights

Concerns over jet fuel supply have intensified as the war involving Iran disrupts regional energy flows and raises costs for carriers. Attacks on Gulf infrastructure and shipping risks have pushed kerosene-based jet fuel prices sharply higher, creating acute pressure on airline operating expenses.

The situation accelerated after strikes began on Feb. 28, 2026, when U.S. and Israeli forces launched coordinated operations against targets in Iran; the resulting damage to regional production and rerouting of tankers reduced effective supply to key refining hubs. Industry data and regional carrier statements point to a rapid rise in spot jet fuel and refinery margin stress in recent weeks.

Airlines have responded by cutting capacity and consolidating routes. Major U.S. carrier announcements signaled short-term schedule trims, and some carriers have modelled scenarios with oil at very elevated levels. Regional national carriers, including Pakistan International Airlines, have also pared back services and removed discounts as fuel bills surge. Those moves reflect immediate attempts to protect cash flow while managing load factors and route profitability.

Market indicators show Brent crude and refined product prices spiking since the conflict escalated; news agencies report double-digit to multi-decade percentage increases in crude and jet fuel in the weeks following the strikes. Rising jet fuel costs mean higher unit costs for carriers, with near-term implications for fares, capacity and cargo economics; supply-chain knock-on effects could lift costs across transport-intensive sectors.

Analysts expect elevated volatility to persist until regional security stabilizes or sizable additional supply enters markets. Potential offsets include strategic reserve releases, alternative shipping arrangements and refinery reconfigurations, but these take time. In the meantime, airlines are likely to pursue further operational adjustments, targeted surcharges and hedging where available; investors will monitor carrier margin resilience and energy market responses closely.