US airlines fuel spending surges 84% to $6.66B as Iran war drives costs

The Iran conflict has pushed US airline fuel costs past $6 billion for a second straight month, with spending up 84% from a year ago.

US airlines spent $6.66 billion on jet fuel in May, the second consecutive month above $6 billion, as the Iran war drove average prices 85% higher from a year earlier to $4.09 a gallon, according to Bureau of Transportation Statistics data released Tuesday.

"The sustained spike in jet fuel costs is directly tied to the disruption of crude shipments through the Strait of Hormuz, which handles about 21% of global oil trade," said Elena Fischer, geopolitical risk analyst at Edgen.

Carriers consumed 1.627 billion gallons in May, down 0.6% from a year ago, meaning the spending surge was driven entirely by price rather than volume. The average price of $4.09 per gallon compares with $2.21 in May 2025. April spending totaled $6.47 billion, the agency said.

Fuel represents one of the largest operating costs for airlines, and the 84% spending increase has already prompted carriers to raise fares, add fees and trim flight schedules. Delta Air Lines reports second-quarter results Friday, offering the first major test of how the industry's margins are holding up.

Strait of Hormuz Disruption

The price surge traces directly to the conflict in the Middle East that began this year, disrupting shipping through the Strait of Hormuz, a chokepoint for about 21% of global crude and fuel supplies. Three tankers were struck by projectiles in the strait Tuesday, and the US revoked a license that had allowed Iranian oil sales under a fragile interim ceasefire agreement. The US subsequently launched new strikes against Iran.

Fuel prices have eased from their spring peaks since the US and Iran reached the ceasefire, but Tuesday's escalation threatens to reverse that relief. The average spot price for jet fuel across Chicago, Houston, Los Angeles and New York stood at $2.90 a gallon Monday, according to the Argus US Jet Fuel Index — down from the $4.11 April average but still well above the $2.21 level of May 2025.

Airlines Pass Costs to Travelers

Airlines worldwide have responded to the jump in fuel costs by raising fares and fees and trimming flight schedules. The last time US carriers faced a comparable fuel shock — during the 2022 post-Ukraine invasion spike — jet fuel averaged $3.84 per gallon, and airlines responded with capacity cuts that pushed summer fares to record levels. The current $4.09 average exceeds that peak.

Delta's earnings report Friday will be closely watched for commentary on fuel hedging positions, capacity plans and fare trends. United Airlines, American Airlines and Southwest Airlines follow in subsequent weeks. Analysts expect executives to address how recent declines in spot fuel prices — now at $2.90 — could provide margin relief if the ceasefire holds, and how quickly costs would rise again if the Strait of Hormuz disruption escalates.

This article is for informational purposes only and does not constitute investment advice.