The crisis in the Middle East has sent the jet fuel market into “crazy” territory, with prices likely to rapidly filter down to holiday air fares. Qantas, Air New Zealand and Scandinavian carrier SAS were among a string of airlines to announce ticket price rises on Tuesday (March 10) because of the crisis.

Energy market expert and founder of Market Intelligence at Energy Aspects, Amrita Sen, has told MPs that other airlines are likely to follow suit due to disruptions to Gulf supplies, which account for most of the world’s jet fuel. While attention has focused on crude oil prices, Dr Sen said the impact on jet fuel has been much more severe, with prices doubling or even tripling from around $90 (£67) a barrel.

“Everyone is talking about crude oil but there are prices for jet fuel that have gone above $300 – it is crazy what is going on,” Dr Sen told the Commons Treasury.

“So much production is focused in the Middle East […] it is not going to be possible to replace that through other sources.

“I am expecting quite significant rises in air fares. Some airlines hedge [against price rises] which will help a bit, but we should absolutely be expecting higher air fares for at least the next couple of months,” Dr Sen warned.

At the start of the year, the travel industry was on track to continue its post-pandemic expansion. However, the escalating conflict has already led to fare increases on several international routes in the last week. Flights between Asia and Europe have seen sharp price hikes after airspace closures and reduced capacity through Gulf hubs forced airlines to reroute services.

According to travelmole, experts estimate that transatlantic fares are expected to rise by around 6 to 10% on some carriers, while long-haul Asia-Pacific routes may see increases of roughly 8% to 15% due to higher fuel burn and longer flight paths to avoid restricted airspace.

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Air New Zealand said it had raised one-way economy fares by NZ$10 (£4.42) on domestic routes, NZ$20 (£8.83) on short-haul international services and NZ$90 (£39.80) on long-haul, with more adjustments to prices and schedules possible if jet fuel costs remain elevated.

IAG, which owns British Airways, said a successful hedging strategy meant it had no plans for immediate price rises. However, other carriers warned that passengers could face surcharges to reflect higher fuel prices. Hong Kong Airlines said surcharges of up to 35% would be introduced from Thursday (March 12). This comes after BA announced it would curtail its flight schedule across the region and cancel flights to certain cities “until later this year”.

Destinations in the Middle East are expected to feel the most immediate impact, but markets heavily dependent on long-haul travel could also experience softer demand if ticket prices continue to rise.