Jet fuel prices in the US have spiked ahead of the peak summer travel season, as escalating tensions between the US and Iran stoke fears of disruption at the Strait of Hormuz, a critical global energy artery.
Fuel costs jumped 78% in April to nearly $6.5 billion, following a 26% rise in March, data from the US Department of Transportation released on June 2 showed. The price per gallon (3.78 liters) rose $1.81 from a year earlier to $4.11.
The International Air Transport Association (IATA), representing more than 370 airlines accounting for about 85% of global air traffic, said in its annual report published on June 1 that net industry profit for 2026 is now expected to reach just $23 billion, well below its earlier forecast of about $41 billion and a sharp drop from $45 billion in 2025. IATA called this margin “the weakest result since the COVID-19 era”.
US domestic airfares have risen 5.5% since the conflict erupted (up 2.7% in March and 2.8% in April), according to the Bureau of Labor Statistics, driven by pressure on jet fuel supplies. IATA stressed: “Jet fuel supply is under threat, with prices nearly doubling since late February.”
Despite high fuel prices, domestic summer booking volumes remain strong. The American Automobile Association (AAA) forecasts 3.6 million domestic air travelers over the Memorial Day weekend (May 23–25), marking the start of summer. However, mounting pressure is taking a toll on some carriers. Low-cost airline Spirit Airlines ceased operations in early May after three decades, citing soaring fuel costs.
In April, United Airlines CEO Scott Kirby said the Chicago-based carrier would have to raise fares by as much as 20% due to rising costs. Last week, American Airlines announced it would suspend some transcontinental routes, such as Charlotte–Sacramento and Los Angeles–Pittsburgh, because of higher fuel prices.
The US-Israeli airstrikes on Iran in late February and Iran’s subsequent retaliation have forced major airlines to reroute flights around closed or restricted airspace, increasing fuel burn and straining already tight capacity. Global airlines, particularly European carriers, have already been under pressure on Asian routes due to Russian airspace closures linked to the Ukraine war.
IATA forecasts the global airline fuel bill for 2026 will rise to around $350 billion from $252 billion in 2025, accounting for nearly a third of operating costs. On the US stock market during the June 2 session, shares of several airlines fell (Delta Air Lines down 0.8%, United down 0.35%, JetBlue down more than 1%, Southwest down 0.9%). Meanwhile, oil prices rose more than 5% in Asian trading and nearly 2% in commodities markets after fresh Israeli attacks on Iran. Spot gold held steady around $4,331.69 per ounce after touching a low since March 23 of $4,268.39.
