KQ Hit by Global Fuel Crisis as Iran War Drives Up Jet Fuel Prices

Kenya Airways (KQ) is facing fresh pressure as a global fuel crisis triggered by the ongoing Iran war pushes jet fuel prices higher and disrupts supply chains worldwide.

The airline now finds itself in a difficult position, with fuel reserves estimated at just 50 days, even as the cost of jet fuel continues to rise sharply.

The crisis is being driven by escalating conflict in the Middle East, where the war involving Iran has severely affected global oil flows.

At the centre of the problem is the Strait of Hormuz, one of the most important oil transit routes in the world. The waterway normally carries about 20% of the global oil supply, but traffic has been heavily disrupted due to the conflict, with attacks on infrastructure and shipping routes slowing the movement of fuel.

Globally, the situation has created what experts are calling one of the worst energy shocks in decades. The war has already led to the suspension of a significant portion of global oil and gas supply, sending prices up and creating uncertainty in markets.

Oil prices have surged past $110 per barrel in recent weeks as the conflict escalates, with fears that supply disruptions could worsen if fighting continues.

For airlines like Kenya Airways, the impact is direct and immediate.

“The challenge is not just availability but also surging prices, which are weighing heavily on margins and limiting its ability to pass costs to passengers.”

Jet fuel, which is refined from crude oil, has become more expensive and harder to access. In Africa, prices have climbed to around $211 per barrel, forcing airlines to absorb rising costs at a time when passengers are already sensitive to ticket prices.

“Jet fuel prices in Africa have climbed to about $211 per barrel, significantly higher year-on-year, forcing the carrier to absorb additional costs.”

Industry data shows that fuel can account for up to 40% of an airline’s operating costs, meaning any spike in prices quickly eats into profits. With the current global supply shock, the situation is even more difficult because it is not just about cost — it is also about availability.

The war has also disrupted refining and shipping, creating shortages of key products like jet fuel, diesel, and gasoline. Analysts warn that the impact on refined fuels is even more intense than on crude oil itself, as supply chains struggle to keep up.

KQ on managing crisis

Kenya Airways says it is already feeling the strain and is taking steps to manage the crisis.

“As a result, the airline has initiated a network review that could see cuts to less profitable routes as it seeks to reduce fuel consumption and contain expenses.”

This means some routes could be suspended or reduced, especially those that are not bringing in enough revenue to justify the high fuel costs.

At the same time, the airline is looking at other ways to stay afloat.

“Kenya Airways says it is exploring alternative sourcing options and operational adjustments, while also expanding cargo operations to cushion revenues amid the sustained cost pressure.”

Iran war

Cargo has become an important fallback for many airlines during crises, offering a more stable source of income compared to passenger travel.

The effects of the Iran war are being felt far beyond the Middle East. Countries in Asia are already reporting fuel shortages, while others are limiting exports to protect domestic supply.

Even major economies are struggling to cope, with global markets reacting to what has been described as the largest oil supply disruption in modern history.

For Kenya and other fuel-importing countries in Africa, the situation is especially worrying. Higher fuel costs not only affect airlines but also push up transport, food prices, and the overall cost of living.

For Kenya Airways, the coming weeks will be critical. If the conflict continues and supply remains tight, the airline may be forced to make even tougher decisions, including deeper route cuts or possible fare increases.

For now, the carrier is trying to balance rising global pressure with the need to remain competitive at home — a challenge made harder by a war happening thousands of kilometres away, but with very real consequences on the ground.