Will the Iran ceasefire ease this summer's aviation squeeze? - Ireland News Beep

Analysis: The ceasefire is good news, but the relief won’t be felt by airlines or paying passengers until crude oil becomes jet fuel in plane tanks

When the United States and Iran announced a framework agreement this weekend to end their four-month war and reopen the Strait of Hormuz, the response in energy markets was immediate. Crude prices fell sharply, with Brent dropping to around $83 a barrel. For an aviation industry that has spent the spring dealing with one of the worst fuel shocks in its history, the news should have been an unambiguous relief.

However, it is more complicated than that. The deal is real, and Iran’s own Supreme National Security Council has confirmed it, but a signature on paper in Switzerland is not the same as jet fuel in a wing tank, and the gap between the two is measured in weeks and months. The ceasefire has arrived at a critical moment for the industry: the start of the peak summer season, when European and transatlantic networks run closest to capacity and have the least room to flex.

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It is worth remembering how this started. At the end of February, air strikes on Iran and the retaliation that followed effectively shut the Strait of Hormuz to commercial shipping, triggering what theInternational Energy Agency called the largest supply disruption in the history of the global oil market. Around a fifth of the world’s oil and liquefied natural gas normally passes through that single narrow waterway. When it closed, crude supply fell by roughly 10 million barrels a day, prices surged toward $150 a barrel, and jet fuel climbed to $200/bbl.

The damage to aviation was never only about price. Airspace closures forced carriers onto longer detour routes that burn more fuel and add emissions, while a sharp rise in satellite-navigation jamming and spoofing around the conflict zone created genuine safety concerns for crews already flying unfamiliar paths. The Gulf mega-hubs of Dubai, Doha and Abu Dhabi, which knit together traffic between Europe, Asia and Africa, were disrupted with few easy alternatives. A regional war, in other words, became a global aviation problem within weeks.

Here is the uncomfortable arithmetic. In March, jet fuel had more than doubled in a month and was heading toward $200 a barrel. It has since eased: IATA’s latest weekly monitor (week ending 12 June 2026) put the global average around $139 a barrel. The price remains far above the roughly $96 the industry paid before the war.

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The reason the deal does not flip a switch is that the strait was never the only problem. As IATA director general Willie Walsh warned during earlier ceasefire talks, it will take months to rebuild supply even if the Strait of Hormuz reopens and stays open because the war damaged refining capacity across the Middle East. Crude flowing again is necessary but not sufficient; someone still has to refine it into jet fuel and move it to where the aircraft are.

Aviation runs on a seasonal rhythm. Carriers lose money or break even through the quiet winter and make their year in the summer, which makes a fuel crisis at this time of year especially punishing. The exposure is not uniform, though. Long-haul tickets are often sold many months ahead, so a chunk of this summer’s transatlantic and Asian flights were priced when airlines were either guessing where fuel would land or still reeling from $200 oil, and those seats cannot be repriced now.

Short-haul travel within Europe behaves differently. Passengers typically book just one to two months out, so carriers have been able to feed at least some of the higher fuel cost into more recent fares. The catch is that this is precisely the segment where budget competition is fiercest and margins thinnest, leaving little room to pass costs on without losing the booking.

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The deal also reshuffles who wins. Through the crisis, the airlines that coped best were the heavily hedged: Ryanair, with a large share of fuel locked in cheaply, and IAG, owner of Aer Lingus and British Airways, sat far more comfortably than unhedged carriers like SAS, which cut a thousand flights.

The number of European flights declined by 1.1% in April, the first year-on-year fall since the Covid downturn in 2021, and barely grew in May (+0.5% against the same month in 2025). Traffic between Europe and the Middle East continued to be impacted, declining 24% year-on-year in Week 23 (1-7 June). That same week, though, marked a steadier start to the summer overall: total European traffic up 1.7% week-on-week to 34,459 daily flights, 0.7% above the level a year earlier.

Despite all this, there is a real reason for optimism. Despite the disruption and the high prices, global passenger bookings for travel between June and September actually rose by about 6% compared with last year. Demand, in other words, never blinked. IATA has trimmed its 2026 global airline profit forecast to around $23 billion, down from an earlier $41 billion and expects jet fuel to average roughly $152 a barrel across the year.

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These are painful numbers, but they describe an industry under pressure, not one in retreat. With the ceasefire holding, the worst case, of prolonged closure and $200-plus fuel deep into the winter, now looks unlikely.

For passengers, the lag cuts both ways. Fares rose fast on the way up because airline pricing systems reprice seats thousands of times a day against live fuel costs; they will come down more slowly. Carriers nursing losses from a punishing spring have every incentive to hold elevated summer fares for as long as demand allows. Anyone expecting the ceasefire to translate into cheaper August flights is likely to be disappointed, even as the underlying crisis eases.

The politics give ample reason for caution. Throughout the war, US president Donald Trump repeatedly set deadlines for Iran and then let them slide, announcing pauses and extensions just before each one expired. Israel, which fought alongside the United States, has not endorsed the agreement at all, and its far-right ministers say it does not bind them.

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A market that has been often promised resolutions like this has learned to wait for actions, not statements. There is an irony, too. Trump came to office promising that an energy-abundant America would deliver lower costs, yet the conflict he escalated sent fuel to record highs and squeezed the very consumers he pledged to protect. The ceasefire may now let him claim the credit for relief from a crisis his own strategy did much to create. For airlines and passengers, the more useful question is not who takes the credit, but whether the peace holds long enough for the fuel to actually flow.

There is a pattern here the industry keeps relearning. A geopolitical shock thousands of miles from Dublin or Frankfurt feeds almost instantly into the cost of a summer holiday, because aviation’s fuel supply still runs through a handful of narrow chokepoints it does not control. The ceasefire is genuinely good news, and the resilience of summer demand is better news still. But until the crude flowing again becomes jet fuel sitting in wing tanks, the relief belongs to the markets, not yet to the airlines or the passengers paying their fares.

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The views expressed here are those of the author and do not represent or reflect the views of RTÉ

Will the Iran ceasefire ease this summer’s aviation squeeze?

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