Strait of Hormuz Tensions Continue Driving Up India Jet Fuel Costs

Jet kerosene prices in the Indian market increased significantly during the first half of May 2026 as global crude oil volatility and rising geopolitical tensions in the Middle East disrupted fuel supply chains and lifted aviation fuel costs worldwide. The ongoing conflict involving Iran, along with repeated drone attacks on facilities in the UAE and Saudi Arabia, intensified fears over the safety of oil and gas shipments through the Strait of Hormuz, a critical global energy trade route. These concerns pushed international crude oil prices upward, directly impacting the cost of aviation turbine fuel (ATF), the primary fuel used by airlines in India.

As refinery operations slowed globally because of lower feedstock availability and export restrictions, the supply of jet kerosene tightened further. Refining margins for jet kerosene and other middle distillates also remained historically elevated, supporting additional increases in jet kerosene prices across Asian markets, including India.

In India, airlines such as Air India, IndiGo, and SpiceJet urged state-owned refiners to postpone additional increases in jet kerosene prices for domestic flights until the Middle East conflict stabilizes. Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation continued discussions regarding possible revisions in domestic jet kerosene prices from June onward. Although the Indian government intervened earlier to cap domestic aviation fuel price increases, refiners were still incurring significant losses while selling jet kerosene below replacement costs. Meanwhile, international jet kerosene prices, which remain deregulated, surged sharply during April and climbed further in May.

The increase in jet kerosene prices was also supported by tightening global inventories and disruptions in marine transportation. Restricted tanker movement through the Strait of Hormuz significantly affected global petroleum trade flows, reducing the availability of crude oil required for jet kerosene production. Global oil inventories declined sharply during March and April, while refinery throughput continued falling due to infrastructure disruptions and lower crude imports. India itself reduced crude imports during the period, further affecting domestic jet kerosene supply dynamics.

As per ChemAnalyst, Jet kerosene prices in India are expected to remain elevated in the coming weeks as geopolitical tensions in the Middle East continue to disrupt global crude oil and refined fuel supply chains. Uncertainty surrounding the Strait of Hormuz, along with restricted tanker movement and lower refinery throughput, is likely to keep jet kerosene availability tight across Asian markets. Indian refiners may continue facing pressure from rising import and replacement costs despite possible government intervention to limit domestic fuel price increases.