The Strait of Hormuz has been closed for weeks amid the ongoing U.S.-Israel war against Iran. As global economic systems brace for the major oil shock expected to roil markets when the last pre-war oil shipments arrive at global ports, major airlines are already feeling the pain of fuel scarcity — and passing it along to consumers.
On Thursday, American Airlines became the latest global carrier to hike checked back fees and other travel add-ons in an attempt to offset the rising cost of jet fuel, joining Delta, United, JetBlue, and Southwest Airlines, who announced changes to price baggage fee earlier this month.
The price of jet fuel has almost doubled since the war began. This week, prices hit a high of $4.88 per gallon, compared to around $2.50 in late February.
Overall, domestic flight prices in the United States have increased by between 10-20 percent, depending on the distance and date, with international travel prices facing even more severe hikes as global travelers plan summer excursions.
In response to increased operation costs, airlines have also begun cutting back on route frequency and overall flight volume. The rising cost of jet fuel is also set to ripple though commerce, freight, and mail. Amazon announced that it would be implementing a temporary 3.5 percent surcharge on sellers to cover the price spike. The United States Postal Service has also implemented a short-term 8 percent fee on packages, and FedEx has implemented a surcharge of over 20 percent for some services, and has announced a progressive fee system that triggers higher surcharges in proportion to the increasing prices of jet fuel and diesel.
On Wednesday, Transportation Secretary Sean Duffy — one of the many former Fox News hosts hired into Trump’s Cabinet — claimed in an interview with CNBC that airline CEOs “feel really good about the [fuel] supply.”
“The president thinks about this short-term,” Duffy said. “Thanks to President Trump and American energy dominance, we have a ton of energy in the U.S. So we are less reliant on the Strait of Hormuz than we would have been, say, 25, 30 years ago because of fracking.”
The closing of the strait, the rising cost of fuel, and the supply throttle of other major commodities that transit through the war torn region is expected to impact virtually every sector of the global economy.
As Americans still financially traumatized by post-Covid inflation brace for even higher prices, the president is making clear that they shouldn’t expect help from the federal government to shoulder their growing everyday costs.
“We can’t take care of daycare. We’re a big country. We’re fighting wars,” Trump said last week. “It’s not possible for us to take care of daycare, Medicaid, Medicare, all these things.”
Wars however, have a seemingly bottomless bank account to pull from.
