The four largest US carriers risk incurring $11.6bn in additional fuel costs this year as a direct result of the Middle East conflict, the Financial Times calculated on March 11, based on forward fuel price projections.
American Airlines Group, United Airlines Holdings, Delta Air Lines and Southwest Airlines Co face combined extra fuel costs of $280mn for every week that prices remain at current levels, according to the FT.
Spot jet fuel prices in the US jumped nearly 60% following the closure of the Strait of Hormuz, reaching $3.95 per gallon at the end of last week, according to Argus. By the close of trading on March 10 the price had retreated to $3.40 per gallon, though the US government raised its average 2026 jet fuel price forecast by 37% compared with February projections, to $2.67 per gallon.
American Airlines said in February that every one-cent rise in the price of a gallon of jet fuel would add around $50mn to its annual fuel costs, implying an additional bill of more than $1bn per quarter under current conditions. Unlike their European counterparts, American, Delta and United abandoned fuel hedging around a decade ago, deeming it uneconomical over the long term. Southwest, one of the earliest adopters of hedging, abandoned the practice last year.
In Europe, Fitch identified Latvian carrier airBaltic as the most exposed, with only 6% of its next three months of fuel needs hedged. Turkish Airlines has hedged 36% of its 2026 fuel requirements, while Wizz Air, Ryanair and Lufthansa have covered more than 80% of near-term purchases. British Airways and Air France are also well hedged.
Beyond aviation, the Middle East travel industry is losing $600mn per day due to the war, Gloria Guevara, president of the World Travel and Tourism Council, told the FT. More than 80,000 short-term accommodation bookings in Dubai were cancelled in the week ending March 6, according to analytics firm AirDNA, drawing on data from Airbnb and Vrbo. Some 4mn passengers were stranded across the region over five days last week as flights were cancelled through major hubs including Abu Dhabi, Dubai, Doha and Bahrain, which typically handle more than 500,000 passengers per day, according to Cirium.
Lloyd’s of London underwriters said they remained willing to insure virtually all vessels seeking cover. “All Lloyd’s underwriters continue to discuss deals and will still provide coverage to virtually everyone who asks,” Patrick Davison, Lloyd’s underwriting director, told the FT, describing the slowdown in Hormuz shipping as “not an insurance problem but a question of vessel and crew safety.”