Travel is about to get more expensive as Iran conflict sparks jet fuel crunch

By Fox News · Fox News

Airfares could rise in the weeks ahead as the Iran conflict disrupts energy markets and squeezes jet-fuel supplies, increasing costs for airlines and passengers. Fuel traders are watching the Strait of Hormuz closely, because disruptions from U.S.-Israeli strikes and retaliatory Iranian drone and missile attacks could quickly ripple through global oil and gas flows. Just about 21 miles wide at its narrowest, the Strait of Hormuz, between Iran and Oman, is a global energy choke point. Roughly 20 million barrels of oil move through the waterway each day, along with about one-fifth of global liquefied natural gas (LNG), making it a high value target when regional tensions flare. THE UNLIKELY TOOL TRUMP IS EYEING TO TACKLE RISING OIL PRICES AMID THE IRAN CONFLICT When that energy bottleneck tightens, crude and refined fuel markets can jump. Jet fuel is typically one of airlines' biggest operating costs, so even a modest spike can ripple into ticket prices and fees. Jaime Brito, an energy market analyst, said distributors and airlines value supply security enough to pay a premium, so jet fuel is typically bought in advance through long-term contracts. Jet fuel can be especially vulnerable to disruptions since inventories are typically thinner and storage requires specialized tanks. Unlike gasoline or diesel, there’s very little spot buying in jet fuel markets, which can amplify price swings when supply gets tight. WATCH SHIPPING THROUGH THE STRAIT OF HORMUZ GRIND TO A HALT AMID IRAN CONFLICT That vulnerability is especially relevant now because a sizable share of global jet fuel supply comes from the Middle East. "According to our estimates, the Middle East exports a total of around 1.1 million barrels per day of aviation jet fuel, about 17% of what the world consumes," explained Brito, executive director of refining and oil products at OPIS. In the U.S., the Argus U.S. Jet Fuel Index , a daily benchmark averaging prices in Chicago, Houston, Los Angeles and New York, cl…