Iran Conflict: Should You Book Flights Now as Jet Fuel Prices Rise?

The escalating tensions in the Middle East are sending ripples through the travel industry, prompting questions about the best time to book flights. With flight cancellations mounting and jet fuel costs surging, travelers are understandably anxious about potential disruptions and rising prices. While the situation remains fluid, experts suggest that now is actually a fine time to book, even for domestic travel.

Understanding the Current Disruption

The recent conflict has already led to significant upheaval in air travel. According to Cirium, an aviation analytics company, more than 46,000 flights in and out of the Middle East were canceled between February 28th and March 11th. This includes major hubs like Dubai International, consistently ranked as the world’s busiest airport for international travel by Airports Council International [1], as well as Doha and Abu Dhabi. Beyond the immediate cancellations, the conflict is driving up the cost of jet fuel, a critical expense for airlines worldwide.

The price of jet fuel has jumped dramatically in recent weeks. The Argus U.S. Jet Fuel Index shows a price increase from $2.11 per gallon at the beginning of the year to $3.40 per gallon by March 10th – a gain of over 60% [2]. This surge is largely attributed to disruptions in tanker traffic through the Strait of Hormuz, a vital waterway for global oil transport, after Iran announced it would close the strait.

Why Book Now, Despite the Uncertainty?

Sean Cudahy, an aviation reporter at The Points Guy, advises travelers to go ahead and book flights now, despite the ongoing instability. This recommendation stems from the expectation that prices will likely continue to rise as fuel costs increase and airlines adjust to the changing landscape. The advice applies to both international and domestic flights.

This situation echoes previous global disruptions, such as the onset of the COVID-19 pandemic and Russia’s invasion of Ukraine. In both instances, uncertainty led to increased demand and higher prices for essential resources, including jet fuel. As Rick Joswick, head of the near-term oil analytics team at S&P Global, explains, the current situation is driven by a desire among airlines to secure fuel supplies, even at higher costs, to avoid potential disruptions.

How Airlines are Responding

Several airlines have already signaled their intention to pass on the increased fuel costs to passengers. United Airlines CEO Scott Kirby stated that airfare price hikes would likely begin quickly [3]. Other carriers, like Japan Airlines, publish fuel surcharges based on fluctuating costs [4]. Airlines may choose to implement broad fare increases or target premium fares to mitigate the impact of higher fuel prices.

The U.S. And other nations have responded by tapping into strategic oil reserves in an attempt to stabilize the market [5]. However, Joswick cautions that this measure may not lead to a significant drop in jet fuel prices, as the U.S. Reserve primarily holds crude oil, not jet fuel and logistical challenges exist in distributing refined fuel to areas like California.

Tips for Travelers Booking Flights Now

If you’re planning to travel in the coming months, here are some strategies to consider when booking your flights:

• Avoid Basic Economy Tickets: Opt for standard economy fares that allow for changes, providing flexibility if prices drop or your plans change.
• Consider Using Airline Miles: Booking with miles offers a degree of protection, as you can typically cancel and reclaim your miles if prices decrease.
• Utilize Price Tracking Tools: Services like Google Flights allow you to monitor prices and receive alerts when fares change.
• Understand Third-Party Booking Policies: If booking through sites like Expedia, carefully review their cancellation and change policies.
• Be Mindful of Hubs: Consider avoiding airline hubs in or near the affected region for the next few months, if possible.

The Broader Context: A Potential Crisis

The current situation is reminiscent of the oil crises of the 1970s, according to Joswick. If the closure of the Strait of Hormuz persists for an extended period – over a month – it could lead to a substantial and long-term increase in fuel prices. The disruption to oil flows is particularly concerning, as the strait handles approximately 20% of the world’s oil and liquefied natural gas [6]. Mideast refineries previously supplied around 470,000 barrels of jet fuel daily through the strait to airports in Europe and elsewhere.

The U.S. Military’s recent attacks on Iranian mine-laying vessels near the Strait of Hormuz [7] further underscores the volatility of the region and the potential for continued disruptions.

What to Expect in the Coming Weeks

The situation remains highly dynamic, and further price increases are likely. Airlines are closely monitoring developments and will continue to adjust their pricing strategies accordingly. Travelers should stay informed about the latest news and advisories from airlines and government agencies. The key takeaway is to be prepared for potential disruptions and to book flights with flexibility in mind. The aviation industry, like the global energy market, is bracing for a period of uncertainty, and proactive planning is the best course of action for travelers.

British Airways has already suspended UK repatriation flights from the Middle East [8], highlighting the challenges of operating in the region. The U.S. Embassy has also issued a security alert for the UAE [9], advising travelers to remain vigilant and aware of their surroundings.