Australian travellers should brace for higher airfares as the escalating crisis in the Middle East threatens to disrupt aviation corridors and supply chains, particularly crude oil flows from the Arabian Gulf.
The region remains one of the world’s most critical energy corridors, with a significant proportion of global crude oil exports passing through the Strait of Hormuz. Any prolonged instability has a direct impact on jet fuel pricing, which is closely linked to global oil benchmarks. For airlines operating long-haul routes from Australia to Europe and the Middle East, fuel represents one of the largest operating costs, often accounting for up to 30 per cent of total expenditure.
Should crude supplies tighten or shipping routes face disruption, oil prices are likely to rise sharply. That increase flows quickly through to jet fuel contracts and, ultimately, ticket prices. Australian carriers and international airlines servicing gateways such as Sydney and Melbourne may be forced to introduce fuel surcharges or adjust fares to offset higher operating costs.
Flight Centre’s Graham ‘Skroo’ Turner said there had already been some fare increases particularly one-way as passengers scrambled to get home, abandoning their return flights.
“It will vary a lot in terms of the prices,” Turner told the Today show. “Generally, we’ve seen the prices, not too bad, they might have gone up a little bit, and most of them will be on a return basis.
“But yeah, it’s inevitable that it’s a supply and demand type situation, and they will get more expensive as if as flights, as seats become rarer.”
Closed air corridors
Turner said the only way to relieve the congestion and return thousands of passengers home would be to reopen the air corridors, which is not expected to happen anytime soon.
“That’s really what’s got to happen, and obviously they’ve got to be certain it’s going to be safe,” Turner said. “All these airlines, all these Middle Eastern carriers, they’re high-quality airlines whose safety is absolutely paramount, so but we’re looking forward to possibly some limited flights starting today, both from Emirates and Qatar.
Foreign Minister Penny Wong has also ruled out repatriation flights for Aussies until those commercial flights resume.
“If commercial flights can’t fly, a chartered repatriation flights aren’t going to help so that the airspace has got to be safe and the airspace has got to be opened up,” Turner said on Today. “So I think that’s reasonable. I can absolutely assure you, the Middle Eastern carriers, as soon as it’s safe, they will start flying again, and people will be able to get repatriated as quickly as possible.”
Many carriers are either grounding planes or choosing alternative routes with Chinese carriers using Russian airspace as an alternative. ASs for those Australians who were set to travel back to Australia via Middle East they are having to change and look to alternate routes like the US or Asia.
“If you have the alternative, if you have the choice, there are flights going from Europe through north of Iran, through Turkey and over Afghanistan, or to the south, which is through Egypt,” he said. “So those flights are still flying, relatively unaffected at the moment, and seats are filling, although the other route, of course, is some of the Chinese carriers. Cathay and China Southern (are) going through China because they can fly over Russia. So there are some reasonable alternatives at the moment.
Rerouted flights at a cost
Capacity constraints could further compound the issue. If airspace closures or security concerns impact major hubs in the Gulf – including currently closed transit points such as Dubai and Doha – airlines will be required to reroute flights. Longer flight paths mean increased fuel burn, extended crew hours and reduced aircraft utilisation, all of which add cost pressures across networks.
For Australian travellers, the immediate effect may be fewer discounted fares to Europe and the UK, traditionally reliant on competitive Middle Eastern carriers. Over the longer term, sustained volatility in oil markets could dampen demand, slow capacity growth and delay route expansions.
Major international flights departing Australian airports are typically fuelled with Jet A-1 or Jet Plus. While airlines typically hedge fuel purchases to cushion short-term shocks, a prolonged crisis would likely make airfare increases inevitable, reshaping the cost of outbound travel from Australia well into 2026.
Australia imports most of its aviation fuel through terminals and stores it at major airport fuel farms. The nation typically holds only weeks of liquid fuel stocks (including aviation fuel), meaning supply continuity relies on international imports and logistics.
The push for SAF
Australia is actively developing Sustainable Aviation Fuel (SAF) options, which are crucial for international carriers’ decarbonisation efforts.
A broad category of low-carbon fuels made from biomass (e.g., used cooking oil, agricultural oils, feedstock), waste, or synthetic pathways. These fuels can drop directly into existing Jet A-1 supply systems and be used in current aircraft engines without modification.
SAF can reduce lifecycle carbon emissions by up to ~80 per cent or more compared to conventional jet fuel.
Recent developments include large commercial imports of SAF (e.g., ~2 million litres landed in Sydney for blending) and trials with blended SAF in airline operations.
Australia’s SAF supply is currently limited relative to total demand – much of the initial SAF is imported or in pilot production – but there are plans to scale domestic production using feedstocks like canola and waste oils.
Blended SAF is increasingly introduced into the fuel mix as it becomes available, following global industry trends and sustainability targets.
