Iran war impact on summer travel costs and flights

The ongoing conflict involving Iran is beginning to ripple through the global travel industry, threatening to disrupt the busy summer travel season. As oil prices surge, both flight and hotel bookings are already showing signs of decline, according to industry experts.

The Big Picture

Rising oil prices and tightening fuel supplies are putting pressure on travel worldwide. Drivers are facing higher gasoline costs, while airlines in the U.S. and other regions are cutting back on flights and increasing ticket prices, along with baggage and service fees.

Although airfares have climbed roughly 20% since 2025, airlines remain optimistic that travelers will continue to pay higher prices. In fact, many passengers are still willing to spend extra on legroom, upgraded seats, and additional comfort options.

However, signs of caution are emerging. Mahmood Khan, a professor of hospitality and tourism at Virginia Tech, notes that both flight and hotel bookings have started to decline. According to him, travelers are becoming increasingly hesitant to commit to long-term travel plans.

What to Watch

The most challenging period may still lie ahead. Summer, typically the peak travel season, could see further disruption—especially as the U.S. prepares to co-host the World Cup. In response to weaker demand, hotels in host cities have already begun lowering their prices.

Khan also suggests that rising gas prices may push travelers to reconsider their plans. Many may opt for domestic trips instead of long-distance or international travel to reduce costs.

By the Numbers

Fuel prices tell a striking story. Gasoline has remained above $4 per gallon for several weeks and recently hit a four-year high. In parts of the Midwest, prices even approached $5 per gallon amid tensions surrounding the Strait of Hormuz.

Jet fuel costs have seen an even sharper increase. Before the conflict escalated on February 28, prices ranged between $85 and $90 per barrel. Since then, they have surged past $200 per barrel and continue to fluctuate due to ongoing uncertainty and stalled peace talks.

This spike has directly impacted airfare. Data from travel search engine Kayak shows that average international ticket prices jumped from $776 before the conflict to $1,064 by mid-April. Domestic fares also rose, increasing from $335 to $358.

Booking trends reflect growing concern among travelers. According to aviation analytics firm Cirium, flight bookings to Europe for July—made between early January and late April—are down 10.5% compared to the same period last year. Travel from Europe to the U.S. has dropped even further, falling 12.5%, as regions grapple with jet fuel shortages and rising costs.

State of Play

The Strait of Hormuz, a critical global oil route responsible for around 20% of the world’s oil supply, has become a focal point of tension. Iran has reportedly laid mines, effectively restricting commercial shipping, while the U.S. Navy has imposed a blockade.

The International Energy Agency has warned that Europe could face jet fuel shortages within weeks. Still, some experts believe pricing remains a bigger concern than supply. Henry Harteveldt, an airline industry analyst, points out that European airline executives—especially those in the budget sector—are more worried about soaring fuel costs than actual shortages.

Between the Lines

The United States has relatively strong domestic oil production, which provides some level of protection against global disruptions. However, this insulation is not complete. Regional differences in oil supply and processing create vulnerabilities.

For example, United Airlines CEO Scott Kirby recently described the U.S. West Coast as a “fuel island,” where prices are more sensitive to supply disruptions due to reliance on shipments rather than pipelines.

States like California are particularly exposed. They depend more on imported oil and have higher travel demand due to dense populations. Data from the California Energy Commission shows that the state’s jet fuel reserves have dropped by more than 25%, reaching a two-year low, while refining capacity continues to decline.

The Bottom Line

Experts agree that high jet fuel prices are likely to persist. Until there is a lasting resolution to the Iran conflict and oil production and supply chains in the Gulf return to normal levels, travel costs will remain elevated—and global travel demand may continue to soften.