Iran ceasefire still leaves airlines facing high fuel costs, even if peace endures
The two week ceasefire in the Iran war, announced on 8-Apr-2026, triggered a relief rally in global stock markets, a fall in the cost of government debt and a drop in oil prices.
Nevertheless, oil prices remain significantly higher than their levels before the start of hostilities on 28-Feb-2026.
Moreover, reduced refinery capacity and the backlog of shipping in the Strait of Hormuz means that (at the time of writing on 8-Apr-2026) jet fuel is still close to double its late Feb-2026 price.
This report looks at the long term historical relationship between world GDP growth, oil prices and jet fuel prices and global airline profitability and the outlook for 2026 in the aftermath of the ceasefire.
There are considerable uncertainties over the durability of the ceasefire and the nature of any more permanent agreement between Iran and the US and Israel.
Even if peace endures, damage to energy infrastructure and restrictions on jet fuel availability will likely keep fuel costs high for some time, while sentiment towards air travel to (and via) the Middle East may remain cautious.
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