US domestic airfares have risen 26.5% compared to the previous year, with global prices up 25-30% relative to 2025, according to recent consumer price index data. Jet fuel prices remain a significant factor in the elevated fares, trading around $149 per barrel as of early August—a 65% increase since the start of 2026. Crude oil prices have similarly climbed about 30% since January to roughly $76 per barrel.
Jet fuel represents one of the largest operating costs for airlines, typically accounting for 30-35% of expenses. The pricing surge stems from reduced global oil refining capacity, with substantial refinery closures contributing to supply constraints. Limited refining capacity for jet fuel—only about 10% of refined oil yields usable jet fuel—has made the sector particularly vulnerable to supply disruptions. Some relief has come from a new refinery in West Africa and adjustments by existing refiners aiming to increase jet fuel output to 12-14% of their production.
Beyond fuel costs, other factors constrain airline capacity and keep fares elevated. Manufacturing delays from Boeing and Airbus have slowed aircraft deliveries, while staffing shortages at the Federal Aviation Administration have reduced flights from major airports. Industry analysts note that airlines have used the geopolitical situation as justification for passing increased costs to consumers. Strong travel demand has persisted despite higher prices, giving carriers limited incentive to reduce fares.
Even if a lasting ceasefire materializes and oil prices decline, experts anticipate a gradual normalization period. Historical precedent from energy disruptions, such as Russia’s 2022 invasion of Ukraine, suggests price adjustments could take approximately a year. Current jet fuel inventory levels remain at the lower end of their five-year average, adding uncertainty to the timeline. Travel industry observers caution that profitability pressures—with many airlines operating on thin margins of around 15%—mean carriers are unlikely to discount significantly. The loss of Spirit Airlines earlier this year has further reduced competitive pressure, potentially supporting sustained high fares through the fall and winter travel seasons.
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