The ongoing conflict in the Middle East, involving U.S. and Israeli air assaults on Iran and Iranian retaliatory strikes, has led to widespread flight suspensions by regional airlines. Oil prices have surged over 10% to more than $75 per barrel due to the shutdown of the Strait of Hormuz. Analysts predict potential increases in airfares as airlines face higher fuel costs.
Flights across the Middle East remained largely on hold as of March 3, 2026, following a weekend of disruptions in the Persian Gulf. The U.S. and Israel initiated an air assault against Iran, prompting Iran to launch retaliatory strikes. Dubai-based Emirates and Abu Dhabi-based Etihad Airways announced limited cargo and repatriation flights but continued to suspend all scheduled services. Qatar Airways stated that flights to and from its Doha hub would remain temporarily suspended, with an extension announced on March 4, 2026, due to the closure of Qatari airspace. The airline will resume operations once the Qatar Civil Aviation Authority announces the safe reopening, with a further update scheduled for March 6, 2026, at 09:00 Doha time.
President Donald Trump indicated on March 2, 2026, that the campaign could last four to five weeks or longer, suggesting the conflict may extend beyond the initial phase. This has broader geopolitical implications, particularly for global energy supplies. More than 14 million barrels of crude oil per day pass through the Strait of Hormuz, which is effectively shut down amid the fighting. Oil prices jumped more than 10% from the previous week to over $75 per barrel as of March 3 afternoon.
U.S. airline stocks plunged on March 2 and 3 amid fears of rising fuel costs and international travel disruptions. A TD Cowen report from March 2 noted that the conflict's impact on fuel prices is likely to drive airline price actions in the near term, pressuring earnings. Fuel represents about a third of airlines' total costs, second only to labor.
In a similar scenario during Russia's 2022 invasion of Ukraine, airlines raised fares to cover fuel costs, incorporating $15 to $20 more per ticket without standalone surcharges. Analyst Tom Fitzgerald wrote that airlines typically pass through fuel price increases with a two- to three-month lag, assuming healthy demand.
Travel industry consultant Henry Harteveldt, president of Atmosphere Research Group, suggested airlines may recoup costs by raising fares in premium cabins, keeping coach and basic economy more affordable. However, budget airlines could face greater challenges and pass costs to more travelers. Harteveldt noted, "If oil prices climb to $100 or so per barrel... and if they're sustained at that level, it could be really problematic for airlines." He added that the current situation involves a temporary spike in oil prices, but the duration remains uncertain: "The question that none of us know the answer to is how long does temporary last?"
Fitzgerald of TD Cowen observed that travel demand has proven resilient amid various shocks this decade, though impacts on gasoline prices and consumer spending warrant monitoring.
