The Iran war caused oil prices to skyrocket by up to 70% in just weeks, but it will take a matter of months before jet fuel prices return to their pre-conflict levels, warned the head of the International Air Transport Association (IATA) representing global airlines.
Jet fuel makes up 27% of an airline’s operating budget, according to IATA, making it a carrier’s second-largest expense. Though a tentative ceasefire between the U.S. and Iran has introduced the possibility of the reopening of the Strait of Hormuz—the critical chokepoint through which 20% of the world’s oil normally flows—throttled refining capacity in the Middle East will present a lasting challenge for jet fuel supply, IATA director general Willie Walsh told reporters this week.
