‘Absolute chaos’: Jet fuel price spikes as Strait of Hormuz caught in Middle East conflict
Thursday, 5 March 2026
Airlines are facing a fuel-cost crisis because of the conflict in the Middle East and the soaring price of kerosene.
The price of jet fuel in European markets has surged to a three-and-a-half-year peak, the highest since the shortages of the pandemic.
The price of kerosene for aircraft has significantly decoupled from the price of a barrel of crude oil, which has risen more than 10% this week to about US$81 a barrel and is 20% higher than it was a fortnight ago.
The European aviation sector is dependent for jet fuel supplies on oil production and distribution from the Gulf.
Read more:
Iran conflict hits NZ meat and seafood exports to Gulf states, more disruption expected
The long and short of it: Iran has set the markets’ fear gauge flashing
According to Argus Media, the energy and commodity prices experts, the price of fuel being physically delivered to airlines has risen 23% this week, is up 48% from last Friday, and has gone up 68% in a month. It said trading in the jet fuel market was 'off the charts' and in 'absolute chaos'.
Amaar Khan, an analyst at Argus, said: 'Even though jet fuel supply is under significant threat because of the conflict in the Middle East, market participants said that jet fuel values have become extremely detached from fundamentals. 'No fundamentals can explain these prices,' one trader said.'
Jet fuel prices have been running at near twice the price of Brent crude, a differential never before seen.
Argus said: 'The conflict has had a more pronounced effect on jet fuel than on other oil products, including diesel, as Europe is most dependent on direct jet fuel imports from the Gulf. At least 40 per cent of Europe's jet fuel imports in 2025 came from the Gulf via the Strait of Hormuz. Kuwait is Europe's single-largest jet fuel supplier.'
The strait is currently under blockade by Iran after attacks on the country by the US and Israel.
A prolonged conflict could exacerbate the situation, Argus said. 'European refiners can increase jet fuel output to some extent but probably nowhere near enough to offset any prolonged loss of Mideast Gulf supply.
'Extremely high freight rates are now making imports from other regions less feasible at the same time - coupled with the fact that jet fuel prices are surging everywhere.
'Europe had already become structurally tighter on jet fuel in recent years, because of growing demand.'
Shares of European airlines have fallen sharply. IAG, the British Airways group, is down 16% from the record highs the stock scaled last Friday when it reported record profits. Shares in easyJet, which does not operate in the region, are down 7%.
Wizz Air, another London-listed airline and already under the cosh from the impact of the Ukraine-Russia conflict on its predominantly eastern European operations, has seen its shares fall 15% over the past week.
Ryanair, Europe's busiest airline, recently reported that having forward-bought jet fuel, it is 80% hedged at US$67 a barrel through to March 2027. IAG has said that it has locked in prices for 62% of its fuel for 2026. EasyJet has said it is 62% hedged for the summer season at US$68.80 a barrel.