Flight Cancellations
European airlines are canceling thousands of flights due to soaring jet fuel costs resulting from the war in Iran. Lufthansa announced it would cut 20,000 flights from its schedule through the fall to save on jet fuel. Other European carriers, including KLM and Scandinavian Airlines, have also announced cuts to their schedules. According to ING Research senior economist Rico Luman, European airlines might make deeper cuts to their schedules.
Rising Fuel Costs
Jet fuel prices have roughly doubled since the start of the U.S. and Israeli-led war. Europe imports about a third of its jet fuel, largely from the Middle East, making it particularly vulnerable. Fatih Birol, head of the International Energy Agency, stated that Europe normally gets a large percentage of its jet fuel imports from refineries in the Middle East, "and this is basically now almost zero."
Strait of Hormuz Impact
Energy experts have warned that a prolonged closure of the Strait of Hormuz would lead to higher jet fuel prices and possible shortages in Europe. Iran's grip over the Strait of Hormuz is its most potent deterrent, according to Fawaz Gerges, professor of international relations at the London School of Economics. The prospect of disruption at both Hormuz and Bab al-Mandab would amount to a double shock to the global economy.
US Response
President Trump denied that he's under pressure to end the war with Iran, stating that Tehran is facing a time crunch to stop the conflict. The US military said it intercepted two oil supertankers that tried to evade its effort to prevent passage to and from Iran's ports.
China's Advantage
China has stockpiled oil, reaching nearly 1.4 billion barrels in December, according to the U.S. Energy Information Administration. China added an average of 1.1 million barrels a day of crude to its strategic oil inventories in 2025. Axios co-founder and CEO Jim VandeHei wrote that "The war was the stress test that Beijing's energy strategy was designed for."
Domestic Impact in Iran
The US naval blockade aims to put pressure on the Iranian regime, but ordinary Iranians mostly feel the effects. A staggering reconstruction bill exceeding $200 billion, coupled with IMF projections that inflation could surpass 70%, will place immense strain on Iran's economy.
Military Dissent
Dissent is rising inside the United States military over the US-Israel war on Iran.
Navy Leadership Change
Navy Secretary John Phelan will leave the Trump administration "effective immediately," the Pentagon announced Wednesday. Chief Pentagon spokesperson Sean Parnell said in a statement posted on X, "On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy." The new acting Navy secretary will be Undersecretary Hung Cao.
Economic Repercussions
United Airlines CEO Scott Kirby said plane ticket prices may increase by 15 to 20%. The UN warns that the US-Israeli war on Iran will push 30 million back into poverty due to disruption to fuel and fertiliser supplies, which will hit crop yields.
With limited jet fuel supplies remaining, the International Energy Agency said Europe may need to reduce travel.
For example, Fatih Birol warned last week that Europe had 'maybe six weeks or so' of remaining jet fuel supplies.