How the Strait of Hormuz Crisis Is Driving Higher Gas Prices, Airfares, and Travel Costs in 2026

When such a large portion of global supply is constrained, energy markets react quickly. Oil prices surged early in the crisis, with Brent crude jumping from roughly $70 per barrel to nearly $120 within days before partially easing as markets anticipated negotiations and partial reopening.

How the oil shock raises gasoline prices

Higher crude prices translate quickly into higher gasoline costs for consumers.

According to the U.S. Energy Information Administration’s latest outlook, U.S. retail gasoline prices are expected to average about $3.34 per gallon in 2026, up from roughly $3.10 in 2025 before easing slightly in 2027 if supply conditions improve.

The mechanism is straightforward:

• Less oil moving through Hormuz means tighter global supply.
• Oil prices rise to balance supply and demand.
• Refined fuel products—gasoline, diesel, and jet fuel—become more expensive.

Because energy prices feed directly into transportation and logistics costs, these increases also put upward pressure on broader inflation. Economists note that the 2026 conflict quickly translated into higher retail gasoline prices in the United States and heightened inflation concerns.

Why airlines feel the impact immediately

Airlines are particularly exposed to energy shocks because fuel is one of their largest operating costs.

Jet fuel prices surged during the crisis, with global prices more than doubling compared with the previous year at one point in early 2026.

As fuel costs rise, airlines typically respond in several ways:

• Raising ticket prices or adding fuel surcharges
• Reducing flight frequencies on weaker routes
• Retiring older, less fuel‑efficient aircraft
• Deferring aircraft deliveries or expansion plans

U.S. airlines confirmed they were already reducing flight frequencies and adjusting capacity ahead of the summer travel season in response to soaring jet‑fuel prices.

This capacity discipline helps airlines protect margins but can also make flights scarcer and more expensive for travelers.

Evidence from Canada and Asia

The impact of the fuel shock is already visible in multiple regions.

Canada: Airfares began rising for the first time in nearly two years after the conflict pushed up jet‑fuel prices. Statistics Canada data showed fares rose 2.9% year‑over‑year in March 2026, reversing a long decline.

Asia: Many Asian economies rely heavily on Gulf energy imports transported through Hormuz. As fuel costs climbed, airlines across the Asia‑Pacific region began introducing emergency fuel surcharges and adjusting fares to offset rising costs.

Because international aviation fuel supply chains take time to stabilize, these price increases often persist even after oil flows begin recovering.

The slower impact of U.S. metal tariffs

Energy prices explain most of the immediate travel cost spike, but trade policy is adding a second, slower layer of pressure.

In June 2025, the United States increased Section 232 tariffs on steel and aluminum imports from 25% to 50%.

These tariffs do not directly raise gasoline prices, but they affect aviation in several ways:

• Aircraft manufacturing relies heavily on aluminum and specialized steel.
• Maintenance and replacement parts become more expensive.
• Airport infrastructure and ground equipment costs rise.

Higher input costs across the aviation supply chain eventually show up in airline operating expenses and aircraft prices, which can contribute to higher fares over time.

What this means for inflation and airline finances

The combined effect of energy shocks and tariff‑driven cost increases puts airlines in a difficult position.

If airlines pass the costs through to passengers, ticket prices rise and travel demand may soften. If they absorb the costs instead, profit margins shrink. Either way, the industry faces financial pressure during periods of volatile fuel prices.

At the macroeconomic level, energy shocks are historically inflationary. Oil price spikes raise transportation and logistics costs across the entire economy, from shipping to aviation to consumer fuel purchases.

When prices might stabilize

Energy agencies expect relief eventually, but not immediately.

The U.S. Energy Information Administration projects that global oil markets could gradually stabilize as production and shipping recover, with energy flows returning close to pre‑conflict levels by late 2026 or early 2027 if disruptions ease.

If that happens, crude prices could fall and gasoline prices could ease modestly after 2026. But because airline scheduling, fuel contracts, and aircraft planning operate months ahead, airfare relief may lag energy markets.

The bottom line

The surge in gas prices and travel costs in 2026 reflects a cascading global supply shock:

• Conflict disrupted oil flows through the Strait of Hormuz.
• Oil and jet‑fuel prices jumped worldwide.
• Airlines responded with higher fares and tighter capacity.
• Tariffs on metals increased long‑term aviation costs.

For travelers, the result is simple: summer 2026 flights are likely to remain expensive, especially on long‑haul routes and in regions heavily dependent on Middle Eastern energy.

Meaningful price relief will depend largely on how quickly global energy trade through the Strait of Hormuz returns to normal.