{"id":890909,"date":"2026-09-13T20:46:24","date_gmt":"2026-09-13T20:46:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/890909\/"},"modified":"2026-09-13T20:46:24","modified_gmt":"2026-09-13T20:46:24","slug":"us-iran-war-how-rising-oil-prices-are-set-to-impact-australian-airfares-and-fuel-costs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/890909\/","title":{"rendered":"US-Iran war: How rising oil prices are set to impact Australian airfares and fuel costs"},"content":{"rendered":"

September 13, 2026 \u2014 2:53pm<\/p>\n

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The escalation of the US-Iran war, now in its seventh month, is expected to put more upward pressure on airfares, petrol and diesel as the higher cost of fuel filters through the economy.<\/p>\n

Fears of further oil supply disruptions have deepened after Yemen-based Houthi militants launched a new wave of attacks and seized an island in the Red Sea, the body of water Saudi Arabia has been using as an alternative oil-export route to bypass the Strait of Hormuz.<\/p>\n

\"QantasQantas will review how many seats it can profitably offer, a spokesman said. Bloomberg<\/p>\n

The cost of crude oil rose past $US100 a barrel ($139), almost reaching $US110 last week, while the more expensive and volatile jet fuel climbed to $US163 a barrel. Before the conflict expanded in February, the price was around $US89 a barrel.<\/p>\n

Since then, airlines globally have raised ticket prices, trimmed routes and diverted more funds to operate their fleets. For airlines, fuel is the largest operating expense.<\/p>\n

Qantas chief financial officer Rob Marcolina said the airline will review how many seats it can profitably offer on various routes, ticket pricing, and operating costs.<\/p>\n

Related Article\"A<\/a><\/p>\n

\u201cWe\u2019ve obviously seen a higher fuel cost for the last five or six months, and so the levers that we have been focused on are ones that we\u2019re going back to.\u201d<\/p>\n

\u201cThere\u2019s just a doubling down on the costs and where we can maximise profitability,\u201d he said.<\/p>\n

Already, Qantas\u2019 fuel bill has jumped by $610 million in the year to June 2026 after a $400 million benefit from fuel hedging. In its outlook statement for 1H27, Qantas forecast global jet fuel prices will remain elevated for the rest of calendar year 2026, \u201cwith an assumption being that there would be a continuation of the hostilities\u201d, Marcolina said.<\/p>\n

Virgin, which shielded its profits from the oil price shock last financial<\/a> year by extensive fuel hedging will face a much steeper bill ahead. Airlines use hedging contracts to lock in shipments of fuel at pre-agreed prices and help stabilise their operating costs.<\/p>\n

In August, the company released guidance showing that while it remains 96 per cent hedged in Brent in the first half of fiscal year 2027, its proportion of hedging of the more volatile and expensive jet fuel refining margins fell from around 80 per cent to only 20 per cent.<\/p>\n

\u201cTherefore, yes, we are more exposed,\u201d Virgin CFO Race Strauss said at the end of August.<\/p>\n

While fuel costs were flat for Virgin in FY 2026, they could swell by as much as $700 million in the first half of fiscal year 2027.<\/p>\n

\"RobRob Marcolina is group chief financial officer at Qantas Group.Louie Douvis<\/p>\n

\u201cThe issue that you have is the availability of refining margin to make it economical. Because when you take out any hedge, you need someone on the other side to counter that hedge.\u201d<\/p>\n

Virgin said it had seen a further deterioration in fuel costs over the past month.<\/p>\n

In the current market, no one is betting on lower prices in the short term. Because oil is the main ingredient in petrol, diesel and jet fuel, increases in prices are driving up costs for motorists and airlines in Australia and around the world.<\/p>\n

The national average price of regular unleaded at petrol stations across the nation had risen to $2.13 a litre by the end of last week, up 37 per cent since July, according to figures from the National Roads and Motorists Association.<\/p>\n

\"RaceRace Strauss, CFO of Virgin Australia.Elke Meitzel<\/p>\n

Average diesel prices have risen even more sharply, up 45 per cent to $2.61 a litre.<\/p>\n

Related Article\"Most<\/a><\/p>\n

NRMA spokesman Peter Khoury said there was no good news coming for Australian motorists out of the Middle East. \u201cIf anything, it has gotten worse this week,\u201d he said.<\/p>\n

The deteriorating situation has pushed Australia\u2019s regional oil benchmark Tapis crude up by 37 per cent since July, Khoury said.<\/p>\n

\u201cThe world needs an immediate de-escalation of violence and freedom of shipping to return so that these prices can fall and the world can return to some degree of normality,\u201d he said.<\/p>\n

The Australian Institute of Petroleum\u2019s Malcolm Roberts said: \u201cThe first question is whether it\u2019s going to stay there at $US100 a barrel or whether it\u2019s going to move up or down and stay at a new price point.<\/p>\n

\u201cRight now, the market\u2019s obviously less optimistic about an early resolution [of the conflict] so the prices have gone up.\u201d<\/p>\n

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning<\/a>.<\/p>\n

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\"ChrisChris Zappone<\/a> is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X<\/a>, Facebook<\/a> or email<\/a>.\"NickNick Toscano<\/a> is a business reporter for The Age and Sydney Morning Herald.Connect via X<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"September 13, 2026 \u2014 2:53pm Save You have reached your maximum number of saved items. Remove items from…\n","protected":false},"author":2,"featured_media":890910,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-890909","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/890909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=890909"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/890909\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/890910"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=890909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=890909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=890909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}