As the Middle East crisis endures, there has been significant volatility in global oil markets over recent days. While an oil price shock of this magnitude is a serious cost event for most industries, it is something far more complicated for airlines. Combined with airspace closures, safety considerations, and eroding consumer confidence, the conflict has created the perfect storm for the aviation industry.

It is important to qualify, however, that the Strait of Hormuz closure is not an isolated shock. Airlines have been navigating post-pandemic cost inflation, a hardening insurance market, and a fragile margin recovery long before the conflict escalated. While the ongoing oil market turmoil is widely seen as unprecedented, this crisis has simply exposed airline vulnerability, not created it.

The decisions being made right now in airline boardrooms and procurement functions are not operational adjustments. They are strategic choices with long-term consequences.

How airlines respond in the next 90 days will define their financial performance over the next 12 to 24 months.

The double hit on fuel costs

While rising fuel costs, route disruption, and falling demand are all manageable pressures in isolation, they combine to create a significant challenge. Every week the Strait remains effectively closed, the financial pressure on airlines compounds. On fuel prices specifically, there are two simultaneous developments that are catching some airlines off guard.

Crude oil prices have surged from below $60 in early 2026 to over $119 as the conflict broke out, the highest level since 2022. While prices have since retreated to around $91, they remain at a price that represents a severe cost shock for any airline that was not hedged at pre-crisis levels. Looking ahead, analysts at Kpler have warned that sustained disruption could see prices reach $150 a barrel if the Strait remains effectively closed.

Alongside this, airspace closures in the region have forced carriers to divert, increasing demand for fuel at precisely the moment that costs have surged. A material increase in fuel prices, combined with higher fuel consumption per flight, is more than a simple addition problem. Jet fuel prices in Singapore have jumped to around $230 per barrel, while European jet fuel is trading at nearly double the price of crude, reflecting how supply shortages are also partly driving price movements.  

Ensuring profitability and passenger safety

Every route that touches or transits through the Middle East will now undergo a rapid profitability reassessment. Carriers that rely on Dubai, Doha, or Abu Dhabi as hubs and transit points for long-haul connectivity are not facing a temporary reroute. They are facing a disruption to their network architecture that requires a strategic response, not just an operational one.

A route that was marginally profitable before this crisis may no longer be viable under current cost assumptions. The strategic question for airline leadership is not simply which routes to suspend, but which to protect at a cost because of their long-term strategic value, and which to exit cleanly before the losses compound.

Safety assessments will run in parallel with the financial assessments across all affected carriers. These are not the same conversation, and they should not be treated as one, as consumer confidence is the longest-tail risk in this crisis. Trust is easier to lose than to win back, and passengers who avoid Middle East routes or lose confidence in carriers perceived as prioritising revenue over safety will not return quickly, even after the conflict resolves. How airlines communicate on safety and how proactively they do so will define passenger trust for years, not months.

How airlines can mitigate risk

The temptation in a fast-moving crisis is to respond to each development as it emerges, rather than making deliberate choices ahead of the curve. That approach will cost airlines significantly more than the crisis itself. The good news is that there are specific, actionable levers available to procurement and commercial teams right now.

On fuel procurement, airlines must prioritise extending or restructuring hedging positions where possible before prices move further. Airlines should be reviewing in-plane fuel supply contracts for flexibility clauses and assessing alternative crude sourcing from non-Gulf producers. As Gulf flows tighten, airlines must be prepared to turn to new markets to ensure a stable supply.

When it comes to route strategy, a rapid profitability reassessment across all routes is essential using updated fuel cost assumptions, not pre-crisis baselines. On cost-based management, the fuel shock will pressure airlines to find offsetting savings across their broader cost structure. Procurement teams should be identifying which non-fuel categories can absorb short-term savings without compromising operational integrity or safety.

On supplier and partner relationships, the airlines that will navigate this crisis best are those with genuine depth in their supply chain relationships, not just contractual coverage. In a tightening market, strong relationships deliver better visibility, greater flexibility, and faster response times. Those managing at arm’s length will find that no contract substitutes for a relationship when conditions deteriorate rapidly.

Looking ahead

The carriers that manage the next 90 days well will be better positioned for the growth phase that follows. The ones that don’t will be playing catch-up in a market that won’t wait.

Airlines that use this period to genuinely rebuild procurement resilience, fuel strategy,route diversification, and supplier relationship depth will emerge structurally stronger. Those who treat it as a crisis to survive rather than a forcing function for change will face the same vulnerabilities in the next disruption. While the Middle East crisis will be resolved at some point in time, the structural vulnerabilities it has exposed will not resolve themselves.

The airlines navigating this crisis share one characteristic: they were already designed for disruption rather than stability. That is the product of procurement and supply chain strategies built around resilience rather than pure cost optimisation. For those who weren’t, the next 90 days are both a challenge and an opportunity to change that permanently.