Cargolux increases fuel surcharge to highest level since 2018

Luxembourg-based cargo carrier Cargolux announced an increase in its fuel surcharge to €0.70 per kilo, the highest surcharge since December 2018.

The change goes into effect for all shipments as of Jan. 13, 2020, according to the carrier’s announcement, and reflects increased fuel costs for Cargolux. Lower oil prices in 2019 contributed to lower surcharges for the year, ranging between €0.55-0.65 per kilo.

Oil prices—and, subsequently, jet fuel prices—spiked at the beginning of 2020 following the news that the U.S. government had killed Iran’s General Qassem Soleimani in a drone strike on Friday morning. As of Monday, Bloomberg reported that despite Brent crude oil futures briefly surpassing US$70 per barrel on Monday morning, Brent crude reversed some of those early gains to stand around $68.70 per barrel for March delivery later in the day. West Texas Intermediate, traded in the U.S. Gulf coast, was virtually unchanged.

The longer forecast for jet fuel prices depends largely on how the political situation in the Middle East continues to develop. Most industry observers expect prices to hold around $70 per barrel over the next month, during which time moderate to low-level clashes in the region are expected.

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