Overview
- McKinsey reported Wednesday that the jet-fuel "crack spread"—the gap between crude oil and refined jet fuel prices—could average more than $50 per barrel in 2026, well above historical norms.
- The consultancy said China, India and South Korea have at least partially restricted fuel exports and that Gulf and Asian producers together supply about 40 percent of global jet fuel, tightening available supply.
- Many refineries were already running at high utilization before the recent disruptions, leaving little spare capacity to quickly boost jet-fuel output and forcing countries to draw down inventories.
- Because fuel typically accounts for roughly 30 percent of a ticket price, McKinsey estimates a doubling of fuel costs—if largely passed through—could raise airfares about 20 to 25 percent.
- Increased tanker traffic through the Strait of Hormuz and refiners raising output may ease pressure, but restocking of strategic reserves means elevated prices and volatility are likely to persist for months and prompt airlines to keep fares higher to rebuild margins.