Jet fuel crack spreads now average over $12 per barrel above pre-Covid levels as structural shifts make airline fuel costs more volatile, the International Air Transport Association said in a Friday note.
Airlines face greater fuel-price exposure as jet fuel and crude prices no longer move as closely together as they did historically after the post-Covid recovery in oil demand.
Refinery capacity has declined unevenly, particularly across developed economies, leaving some regions more reliant on imports and increasing their exposure to supply disruptions.
The International Maritime Organization's low-sulfur rules, introduced in 2020, have also helped sustain premiums for middle distillates such as diesel and jet fuel.
The rules require ships to use lower-sulfur fuel oil, increasing demand for middle-distillate products produced during crude oil refining, IATA said.
Diesel remains a key source of refinery profits, so disruptions in diesel and other middle distillates can have an outsized effect on jet fuel supply and pricing.
The conflict involving Iran has exposed additional pressure points in jet fuel supply, leaving airlines less certain about both fuel availability and the cost of managing their exposure, IATA said.