Industry monitors fuel cost increase driven by Iran war

LIMA, Peru — The air cargo industry is monitoring jet fuel volatility tied to the Iran war. IATA Director General Willie Walsh listed restrictions on airspace, protectionism, global disruption and the impact of the oil prices as “extremely challenging” for the industry during a fireside chat at the IATA World Cargo Symposium on March 10. [caption id="attachment_57295850" align="aligncenter" width="2277"] Julia Seiermann, head of industry analysis at IATA, presenting during the World Cargo Symposium 2026. (Courtesy/IATA)[/caption] The rising fuel costs will affect some carriers, such as U.S. airlines , more quickly than their European counterparts, which may have hedged their fuel costs, but the entire industry will see price adjustments reflecting the increase in oil prices, he said. Brent crude oil was trading at about $73 a barrel just before Feb. 28. Today, that price is about $92 per barrel after a peak of almost $120 this week. Fuel hedging may have given European carriers a head start as oil prices increased by 22% , the highest the region has seen since the outbreak of the Russia-Ukraine War in 2022. “It’s only been a couple of weeks now, but we have seen some widening tax credits. But even though the crude price has come down, we’re not seeing a corresponding decrease in the price of jet fuel,” Walsh said. “Clearly there are some issues around the refining capacity for jet fuel.” Jet fuel prices could alter air cargo traffic volumes if the war persists, he said. “We thought that 2025 [traffic growth] originally was going to be at 0.7%, but it grew by 3.4%, and this year, 2.6%,” Walsh said. “I think the fundamentals continue to be quite robust. I certainly wouldn't be concerned at this stage.” But, he said, oil prices could affect traffic and profitability. He pointed out that the industry was profitable even from 2011 through 2013, when the oil price was as high as $130 per barrel. Air cargo critical to economy With no end in sight to the war, fuel markets are expected to remain volatile, though the air cargo industry has shown resilience in navigating such challenges. When it comes to risk aversion, the air cargo sector has repeatedly proven to be very good at helping the global economy absorb risks, Julia Seiermann, head of industry analysis at IATA, said during a presentation at the conference. Industry stakeholders were able to overcome the U.S. trade policies and higher tariffs, which rose to 17% at one point, the highest level in almost a century, Seiermann said. To address this challenge, exporters front-loaded deliveries to the U.S. while collaborating with carriers to reroute trade goods, she said. “Looking ahead to 2026, trade growth may slow,” Seiermann said. “However, as trade policy uncertainty persists and the demand for AI and e-commerce continue to grow, air cargo is expected to remain a critical enabler of the global economy.” Cargo Facts will present four invaluable events for airfreight professionals in 2026, the next of which is <a class="Hyperlink SCXW113043295 BCX0" style="color: #ff0000;" href="https://cargofactsevents.com/asia/?utm_campaign=22235567-CF%20Asia%202026&utm_source=Editorial&utm_medium=article%20event%20footer&utm_term=CF%20website&utm_content=Learn%20More&utm_source=Weekly+Update+-+Cargo+Facts&utm_campaign=fbe548904b-CF+Update_COPY_01&utm_medium=email&utm_term=0_621baa6827-fbe548904b-40083601&mc_cid=fbe548904b&mc_eid=adbe8bb0b4" target="_blank" rel="noreferrer noopener"> Cargo Facts Asia on March 23-25. To see the agendas and register for the events, visit CargoFactsEvents.com .

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