Air freight under threat from Middle East war

While motorists, farmers and truckers become increasingly worried about supplies of petrol and diesel, the growing oil shock could also impact the movement of goods and people in and out of the country by air.

Passenger and cargo aviation are likely to face increasing pressure if disruption in the Middle East persists, with jet fuel prices rising as supply chains adjust. The repercussions of the Iran war are emerging not just in oil markets, but in the refined fuels that transport systems rely on.

“Everyone focuses on oil,” says CommBank Head of Commodities and Sustainable Economics Vivek Dhar.

“But at the end of the day, what businesses and consumers actually use is the fuel that is refined from oil,” he says.

“In particular, jet fuel prices have jumped significantly,” Dhar says. “Buyers are competing more aggressively for that, which is pushing up global prices.”

According to peak industry group the International Air Transport Association, the global average jet fuel price last week rose 11.2% compared to the week before, to $175.00 a barrel.

What this means for Australian travellers

Australia does refine some jet fuel locally, but official petroleum statistics show the country still relies heavily on imports to keep planes moving.

Using the Department of Energy’s December 2025 Australian Petroleum Statistics data, local refinery production of aviation turbine fuel was about 1.4 billion litres in 2025, compared with roughly 8.1 billion litres imported. China, Singapore and South Korea are among Australia’s biggest overseas suppliers.

On 12 March, Reuters reported that Beijing had effectively halted March exports of refined fuels, including aviation fuel, for cargoes that had not yet cleared customs.

“Flights are going to be more expensive - that’s probably the base expectation for as long as this crisis lasts,” Dhar says.

What this means for the transport of goods to and from Australia

While travellers will no doubt be affected, air freight, which relies on the same fuel supply, may also face higher costs and tighter capacity under these conditions.

The Bureau of Infrastructure and Transport Research Economics (BITRE) says international air freight, while less than 1 per cent of Australia's merchandise trade by volume, accounts for about 21 per cent by value.

“If airlines can’t secure fuel for cargo operations, we could start to see disruptions and cancellations that impact the availability of certain goods,” Dhar says.

Disruption may take time to ease

Dhar expects the disruption to persist for months rather than weeks, with time needed for supply chains to adjust and normalise.

“We expect jet fuel prices to remain elevated while this disruption continues,” he says.