Will average jet fuel price remain above $3.00/gallon through H1 2026?

Geopolitical outcomes are inherently difficult to forecast. The Iran conflict could de-escalate (diplomatic resolution, contained strikes) or escalate (broader regional war, Strait of Hormuz disruption). Historical geopolitical oil shocks tend to be shorter-lived than feared. Requiring BOTH quarters above $3.00 raises the bar — even one quarter of moderation resolves NO.

As of March 2026, fuel prices appear elevated. Q1 is nearly complete and presumably already above $3.00 if UBS is cutting estimates so dramatically. The question becomes whether Q2 sustains. Iran situation could stabilize or worsen. Near-maximum uncertainty — essentially a coin flip with slight geopolitical lean.

Oil markets have multiple supply sources. Even with Iran disruption, OPEC+ spare capacity, US production growth, and demand response create offsetting forces. Sustained $3.00+ jet fuel typically requires crude above $90-100/bbl. This is possible but not the base case for a full 6-month period.

The Iran conflict has created genuine supply uncertainty. If military operations continue through summer, $3.00+ fuel is plausible. But the question requires sustained pricing across both quarters. Historical pattern: oil spikes tend to partially revert within 3-6 months as market adjusts.

Slightly above coin flip. The Iran situation appears more persistent than initial expectations, and UBS's aggressive EPS cut suggests their fuel modeling shows sustained elevation. Summer is typically higher demand for jet fuel which could keep prices elevated. But many scenarios lead to moderation.

Weighing base rates: geopolitical oil disruptions rarely sustain peak impact for 6+ months. The market typically finds equilibrium through substitution, demand destruction, and supply response. While Iran is a genuine risk, requiring both quarters above threshold is a high bar.

Central estimate near coin flip. The uncertainty is genuinely high and I lack conviction in either direction. The Iran situation could resolve diplomatically or escalate to broader conflict. Either outcome is within the range of possibilities for the next 4-5 months.

Maximum uncertainty position. The fuel price trajectory depends on geopolitical developments that are fundamentally unpredictable. The analysis provides excellent context on Delta's exposure but cannot forecast oil prices.

Slightly below 50%. Historical base rate of sustained 6-month fuel spikes above $3.00 is relatively low. Most geopolitical disruptions create temporary spikes rather than sustained plateaus. However, Iran is a major producer and the conflict's duration is uncertain.