The impact of soaring oil prices is widening as predictions for crude continue to climb

Global Economic Impact of Rising Oil Prices

The recent sharp increase in oil prices over the past three weeks is beginning to have widespread effects on the world economy. As energy costs climb, businesses are feeling the strain, and analysts are predicting even higher prices ahead.

Both Brent crude (), the global standard, and West Texas Intermediate (WTI) (), the US benchmark, have surged since conflict erupted in the Middle East. Currently, both are trading over 40% higher than just a month ago, with Brent holding above $100 per barrel and WTI in the mid-$90s.

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Prices for refined oil products—such as gasoline, diesel, and jet fuel—have risen even more sharply, affecting a wide range of industries.

The Middle East’s Role in Oil and Fuel Supply

The Middle East is not only a crucial passage for about 20% of the world’s oil and liquefied natural gas via the Strait of Hormuz, but it is also a major refining center. According to Vortexa, the region supplies around 900,000 barrels per day (bpd) of diesel and gas oil and about 350,000 bpd of jet fuel, accounting for roughly 10% and 20% of global seaborne supply, respectively.

Airlines Face Soaring Jet Fuel Costs

Airlines are among the industries most affected by these rising costs. Jet fuel is one of their largest expenses, and the recent spike in crude oil has led to a significant increase in jet fuel prices. This puts pressure on airline profits, especially for those with limited fuel price hedging or those operating in highly competitive markets where raising ticket prices is difficult.

According to Bloomberg, the price of front-month jet fuel swaps on the US Gulf Coast—a key benchmark for airlines—has nearly doubled in the past month, rising from about $229 to over $423 per gallon. Delta Air Lines () CEO Ed Bastian stated that the company expects jet fuel to add $400 million in expenses just through March.

Bastian commented at a JPMorgan industrials conference that these changes will force companies, especially those already struggling, to rethink their business strategies in response to the fuel price surge.

He also mentioned that airlines are already increasing fuel surcharges and base fares to offset these higher costs, emphasizing the need to protect profit margins.

At the same event, American Airlines () CEO Robert Isom said the airline expects an additional $400 million in costs in the first quarter due to higher jet fuel prices, noting that the company would have been profitable if not for the recent fuel price surge.

Diesel Price Surge Hits Freight and Logistics

The freight and logistics sector is also feeling the impact as diesel prices climb even faster than crude. Diesel is vital for US freight transport, and rising costs are increasing expenses for manufacturers, retailers, and agricultural exporters—costs that are ultimately passed on to consumers.

According to Bloomberg, the national average price for diesel surpassed $5 per gallon in March for the first time since 2022, after being below $3.80 before the conflict began. Bank of America analyst Lorraine Hutchinson noted that diesel price increases quickly affect domestic trucking, squeezing margins for businesses that rely on trucking to move goods nationwide.

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Bank of America’s Ken Hoexter reported that transportation stocks he tracks have fallen an average of 12% since the conflict started, following a strong start to 2026 when the sector was up over 20%.

Concerns Over Prolonged Supply Disruptions

Analysts are increasingly worried that the supply shock pushing prices higher could last longer than initially thought. Damage to energy facilities and interruptions to major shipping routes have led some experts to warn that crude prices could rise even further if these disruptions persist.

Hoexter explained that while higher fuel costs are often temporary and offset by increased surcharges, the possibility of a drawn-out conflict has raised fears of reduced demand in the near term.

For buyers of refined products like jet fuel, the main concern is how long the conflict will continue to disrupt supplies and how much further prices might rise.

Forecasts Point to Even Higher Oil Prices

Energy officials and Wall Street strategists warn that oil prices could climb much higher. Saudi Arabian authorities are now predicting Brent could reach $180 per barrel if regional disruptions last through late April, according to the Wall Street Journal.

Maximilian Layton, Citi’s head of global commodities, wrote that if oil flows are disrupted for four to six weeks, Brent could rise to $110–$120. Should the conflict extend into June, prices could soar to $200, far exceeding Brent’s previous record of around $147.

For companies dependent on refined oil products, these increases mean even steeper costs for jet fuel, gasoline, diesel, and other derivatives.

“When your top cost item doubles almost overnight, the impact is significant,” Delta’s Bastian remarked.