Aviation Fuel Prices Climbing amid Middle Eastern Chaos

The turmoil in the Middle East resulting from the U.S. and Israeli attack on Iran is impacting the world fuel markets, as Iran vowed it would shut down commercial shipping traffic through the crucial Strait of Hormuz. Over the past week, the price of Brent crude oil jumped by 15%, from $70.77 a barrel to more than $81, while West Texas Intermediate (WTI) rose by nearly $9 a barrel.

Spot prices for Jet-A in the U.S. averaged $3.23 a gallon yesterday, up from the five-day average of $2.70 per gallon. Retail jet fuel prices at some Northeast U.S. business aviation hubs reached $10 per gallon, while at Los Angeles-area Van Nuys Airport (KVNY) they were hovering around $7.

“In the initial reaction to the events, no petroleum market has been spared,” said Denton Cinquegrana, chief oil analyst with energy commodity analyst OPIS. “Gasoline prices are up, the national average for retail diesel has topped $4 per gallon, and jet fuel prices have skyrocketed over the course of the past several days.”

Cinquegrana told AIN that while fuel prices may spike, he does not expect operators to encounter any shortages. “Despite the higher prices, U.S. product supplies are expected to be fine, as U.S. refiners are particularly advantaged compared to others around the world.”