The indefinite United States-Israel war against Iran is spiking gas prices for American consumers, and soon it could also be upending your travel plans and raising airfare, too.
The Strait of Hormuz, a waterway off Iran’s coast, is a lifeline for one-fifth of the world’s oil and it remains effectively shut down while it gets targeted. The global jet fuel price has risen 58.4% from where it was a week before, according to the International Air Transport Association.
“The Strait of Hormuz is so vital that it’s causing oil to skyrocket, which has an impact on jet fuel,” said Patrick De Haan, head of petroleum analysis at price-tracking website GasBuddy. On top of that, countries like China that refine oil are slowing down production as a result of this volatility, which is a “double whammy” for jet fuel prices, he added.
This week, international airlines like Air New Zealand and SAS blamed the rising price of jet fuel as the reason for their fare increases.
“This situation is extremely volatile,” De Haan said, which is why it’s a good time to secure your airfare now while prices are “decent.” The longer this uncertainty continues, “the longer that airfares may remain elevated,” he said.
No U.S. airline has said it is increasing consumer costs due to the Iran war, but United Airlines CEO Scott Kirby recently said higher fuel costs will start affecting airfares, and it will “probably start quick.” U.S. air carriers largely do not hedge for fluctuating oil prices, so sudden fuel cost spikes can have immediate impacts on their business.
This additional cost could disproportionately hurt budget airlines like Spirit that “are the most vulnerable because of the price of oil,” said Katy Nastro, a travel expert and spokesperson for Going, a company that tracks airfare deals. These low-cost carriers “can’t afford that to their bottom line.”
Tom Kloza, an independent oil analyst, said rising jet fuel costs could also impact certain flight routes more than others. Western U.S. states and Pacific Rim flights that rely on Asian oil refineries for jet fuel would see “the most elevated prices” for fuel surcharges or airfares, he said.
“As long as the Strait [of Hormuz] is closed, I would be inclined to book my fares now, as opposed to later,” Kloza said.
This Is How You Should Buy A Ticket Right Now
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The good news with searching for airfare bargains: “There are still deals available,” Nastro said. “It’s not like we’ve seen the well dried up. We’re seeing consistently what we typically see at this point in the year.”
And not all higher airfare prices in the coming weeks are connected to the Iran war. If you’re looking for summer flight deals, you should be booking right now regardless of what’s happening in the Middle East, because summer is a “peak season” for travel and flights are inherently more expensive, Nastro said.
Nastro said that in general for a peak travel season, you should be booking domestic flights between three and seven months before your departure date, and for international flights, you have “wider of a window” between four and 10 months before your departure.
To create more certainty for yourself in this uncertain time, Nastro recommends booking a main economy ticket that is refundable, so you can cancel or change your plans and get your flight credit back in case you need to reschedule due to the Iran war.
Booking in main economy will cost more upfront than a basic fare, but “you’re going to have the flexibility to make changes to your plans if, in fact, something else happens,” she said. With a main economy ticket, you can also rebook the flight and save yourself money if you notice a sudden price drop before your departure date later.
No one knows how long the Iran war will last, so there is no guaranteed date of when prices will go up or down and by how much. But one thing that’s for sure: Global uncertainty fuels travel uncertainty for consumers.
“We’re in a lot of uncharted territory with this whole situation, but I don’t think airlines are going to be in a hurry to lower prices,” De Haan said.