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Iran blocked the movement of oil tankers through the critical Strait of Hormuz trade route following joint US-Israeli strikes on several key Iranian sites
03:16, Tue, Apr 14, 2026 Updated: 03:23, Tue, Apr 14, 2026
Qantas plane (file image) (Image: Getty)
Australian international and domestic carrier Qantas expects to pay hundreds of millions of dollars more for fuel in 2026 as oil prices have soared due to the Middle East conflict.
Iran blocked the movement of oil tankers through the critical Strait of Hormuz trade route following joint US-Israeli strikes on several key Iranian sites since February 28. About 20% of all global oil traded passes through the strait.
Qantas has said higher international airfares would only partly offset the higher fuel costs.
The airline expects to pay between $3.1 billion and $3.3 billion (Australian Dollars) for fuel in the six months to June 30 despite hedging its oil supply, the Australian Financial Review reported.
The company cannot hedge refinery costs, which have risen five-fold.
This will add between $600 million and $800 million (around £400m) to Qantas’ expected fuel bill for the second half of the year, but this will be partly made up for in better than previously expected earnings from international flights.
The airline expects to earn double revenues per available seat kilometre, a key measure for airlines, from international flying after Middle Eastern airlines were forced to reduce services amid the conflict which has widened to involve the region. Iran has lashed out at its neighbours in response to US-Israeli strikes.
Fuel unavailable in Wales (Image: Getty)
The higher fuel costs and looming scarcity of supplies have pushed Qantas to cut domestic and regional services. It has been reported that this involves reduced seat capacity by 5 per cent in coming weeks.
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The airline will axe flights that are not full and increasingly consolidate services on busy capital city routes.
"The group is working closely with the government and jet fuel suppliers who continue to provide confidence in fuel supply for the remainder of April and well into May. We are closely monitoring the situation given the ongoing uncertainty in global fuel supply chains," Qantas said in a statement.
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