The fallout from the rise in oil prices over the past three weeks is beginning to ripple more widely through the global economy as higher energy costs add pressure to businesses — and analysts’ forecasts are only climbing.
Futures on Brent crude (BZ=F), the international benchmark, and U.S. benchmark West Texas Intermediate (WTI) (CL=F) have risen since the outbreak of conflict in the Middle East. Both are now trading 40% higher than a month ago after briefly climbing even higher. Brent is steady above $100 a barrel, while WTI is trading in the mid-$90s.
Read more: How the price of oil jolts your wallet from gas to groceries.
Prices of so-called “refined” products made from crude oil – gasoline, diesel, jet fuel, and others – have risen further, putting pressure on a combination of market sectors.
As nearly a fifth of the world’s oil and liquefied natural gas (LNG) passes through the Strait of Hormuz to reach international markets, the Middle East is also a major refining hub. About 900,000 barrels per day (bpd) of diesel and gas oil, and about 350,000 bpd of jet fuel, come from the Gulf, according to data from Vortexa – good for about 10% and 20% of global marine supplies, respectively.
Airlines are the most directly exposed. Jet fuel is typically one of the biggest operating expenses for carriers, and the recent rally in crude oil has driven up the cost of jet fuel used to power commercial flights. Higher fuel bills can quickly squeeze profits, especially for airlines that have limited hedging or operate in highly competitive markets where it is difficult to raise ticket prices.
Next-month jet fuel replacement prices in the U.S. Gulf Coast — used by airlines to estimate fuel prices — nearly doubled last month, to trade above $423 a gallon from about $229 a month ago, according to Bloomberg data. Delta Air Lines (DAL) CEO Ed Bastian said the airline expects jet fuel. Add $400 million to the cost. Only until March
“It will certainly change business plans, especially the shorter and closer you have to the recovery and the spikes,” Bastian said at an industry sector conference hosted by JPMorgan.
Bastian noted that airlines are already increasing fuel surcharges and base fares that customers pay, noting that “that’s something we have to cover to maintain our margins.”
American Airlines (AAL) CEO Robert Isom said at the same event that American Spending is expected to increase by $400 million. from the impact of higher jet fuel prices in the first quarter, and that the airline’s first quarter would have been profitable had it not been for the fuel run-up.
The diesel market is also under pressure in freight and logistics networks. Diesel, where prices have risen faster than crude oil, is the backbone of the U.S. shipping industry, raising transportation costs for manufacturers, retailers and agricultural exporters that are ultimately passed on to consumers.
The national average diesel price surpassed $5 a gallon for the first time since 2022 after sitting below $3.80 in early March, according to Bloomberg data. Bank of America analyst Lorraine Hutchinson wrote in a recent client note that diesel prices for domestic trucking “appear quickly,” squeezing the margins of any business that relies on the U.S. trucking industry to transport goods across the country.
Workers prepare a tanker truck for a gasoline delivery at a Costco gas station in Hawthorne, California, on March 18. Oil prices rose after a strike at a major Iranian gas facility. (Photo by Patrick T. Fallon/AFP via Getty Images) ·Patrick T. Fallon via Getty Images
Bank of America analyst Ken Hoekster noted Thursday that transportation equities he covers have pulled back an average of 12 percent since the war began, after “a strong start in 2026 where transportation was up 20.1 percent.”
At the same time, analysts are increasingly concerned that the supply shock driving prices may prove more lasting than initially expected. Damage to energy infrastructure and disruptions to key shipping routes have many forecasters warning that crude could rise further if flows remain constrained.
“While the increase in fuel prices … would generally be considered a temporary pass-through ultimately made up of higher fuel surcharge revenue, we believe the prospect of a prolonged conflict has raised concerns about near-term demand destruction,” Hoexter said.
Just as for the oil and gas industry, the key question for buyers of refined products like jet fuel is duration: How long will the conflict last, how long will it continue to disrupt global flows — and how high will prices go?
According to energy officials and Wall Street strategists, they could go much higher. Saudi Arabian authorities now Brent contracts estimate at $180 per barrel If the disruptions in the region continue until the end of April, the Wall Street Journal reported.
On Wall Street, Citi’s head of global commodities Maximilian Leighton wrote in a recent note that Brent contracts could reach $110 to $120 under the bank’s base case of four to six weeks of affected flows. If the conflict continues into June, Layton wrote, prices could reach $200, well above Brent’s all-time high of $147.
For businesses that rely on refined products, higher oil prices will also mean higher prices for jet fuel, gasoline, diesel, and other oil derivatives.
“When you double your No. 1 or No. 2 value item in your P&L almost overnight, [that has] Significant impact,” said Delta’s Bastian.
Jack Connelly is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him. jake.conley@yahooinc.com.
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