United CEO stated that airline ticket prices in the U.S. may increase due to higher oil costs caused by the conflict in Iran

Potential Increase in U.S. Airfares Amid Global Oil Price Surge

Air travelers in the United States may soon encounter higher ticket prices as escalating international oil prices, fueled by the ongoing conflict involving Iran, drive up the cost of jet fuel.

Industry Leaders Warn of Financial Impact

During a recent industry gathering, United Airlines CEO Scott Kirby highlighted that the surge in fuel expenses will significantly affect the airline’s financial performance this quarter, according to CNBC. He also indicated that travelers could see airfare increases in the near future. United Airlines confirmed these statements to CBS News.

Oil Prices Reach Multi-Year Highs

The price of West Texas Intermediate, the primary U.S. oil benchmark, soared by over 11% on Friday, approaching $91 per barrel after President Trump called for Iran’s “unconditional surrender,” raising fears of a prolonged conflict. Meanwhile, Brent crude, the global standard, climbed to $92.47 per barrel, marking its highest point in nearly two years.

Jet Fuel Costs Skyrocket

Jet fuel, which typically makes up around 20% of airline operating costs, reached $3.95 per gallon on Thursday—an increase of 56% from $2.50 in late February, just before the joint U.S.-Israel military action against Iran. This data comes from the Argus U.S. Jet Fuel Index.

Supply Chain Disruptions and Global Impact

The Strait of Hormuz, a critical shipping lane for oil and liquefied natural gas in the Middle East, has been effectively shut down due to the conflict. This disruption is causing dramatic increases in global jet fuel prices, according to James Noel-Beswick, head of commodities at the market research firm Sparta.

Noel-Beswick also pointed out that European jet fuel prices have reached their highest levels since 2022, as airlines contend with both extended flight paths and a tightening supply of fuel.

Broader Economic Effects

Vidya Mani, a visiting associate professor at Cornell University’s SC Johnson College of Business, explained to CBS News that restrictions on oil and gas supplies caused by the war could trigger inflation across various sectors.

“If these conditions persist for weeks or months, the cumulative impact will ripple through supply chains, especially as major manufacturing centers struggle with limited energy access,” she noted.

Revenue Losses for Airlines

Airlines are already experiencing financial setbacks from canceled or rerouted flights in the Middle East. According to Fitch Ratings, the length of the conflict will play a crucial role in determining the extent of these losses.

“Operational disruptions lead to increased costs from longer routes, extra technical stops, overtime for crews, and higher expenses for accommodation and ground handling,” Fitch analysts stated in a recent report. “In addition to lost revenue, airlines are likely to face higher fuel expenses.”