Willie Walsh, head of the International Air Transport Association, said it could take months for jet fuel supplies to stabilize even if the Strait of Hormuz remains open, due to damage and disruption to refining capacity across the Middle East.

Airlines are facing what executives describe as their most severe operational strain in years, as Iran’s earlier closure of the key shipping route choked global jet fuel supply, pushing prices sharply higher.

Although oil prices fell below $100 a barrel following the ceasefire announcement, jet fuel costs remain elevated.Delta Air Lines said it expects lower-than-forecast second-quarter profit and plans to reduce capacity across its network to offset an estimated $2 billion increase in fuel expenses.

The carrier projects jet fuel prices at around $4.30 per gallon for the June quarter, significantly higher than a year earlier.Fuel typically accounts for about 27% of airline operating costs, making the recent surge particularly burdensome.

Industry data indicates jet fuel prices have more than doubled since the onset of the Iran conflict, outpacing increases in crude oil.Airlines globally have responded by raising fares, cutting flights, carrying additional fuel from origin airports and adding refueling stops to manage supply uncertainty.

Walsh said that while crude prices may ease, jet fuel is likely to remain relatively expensive in the near term due to refinery constraints. “Even if it reopens and stays open, it will take months to restore supply to required levels,” he said.The disruption is also affecting adjacent sectors.

TUI said it is assessing options for two cruise ships stranded in Abu Dhabi and Doha since the conflict began, noting it could take weeks to resume operations.Analysts said the ceasefire has supported airline stocks, with some describing the situation as a potential buying opportunity.

However, broader recovery in travel demand may lag, with economists pointing to a prolonged impact on consumer confidence.

According to Oxford Economics, it could take several months for traveler sentiment to normalize, even under a stable ceasefire scenario, as safety perceptions recover gradually.

The Middle East tourism sector, valued at roughly $367 billion, is also expected to face a delayed rebound, reflecting the wider economic fallout from the conflict and supply chain disruptions.

Willie Walsh, director general of the International Air Transport Association, told reporters in Singapore that while crude prices had fallen below $100 per barrel following a U.S.-Iran ceasefire announcement, jet fuel costs were likely to remain elevated due to constraints on refining output.

“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East,” Walsh said, adding that the region is critical to global supply of refined products beyond aviation fuel.

The Strait of Hormuz, which carries about a fifth of the world’s oil trade, has been heavily disrupted during the recent conflict, squeezing fuel availability and driving up costs across the aviation sector.

Airlines in Asia have responded by cutting flights, carrying additional fuel from origin airports and adding refueling stops, measures that have increased operational costs for carriers already dealing with a sharp rise in jet fuel prices.

The impact has been most acute in import-dependent markets such as Vietnam, Myanmar and Pakistan, where supply constraints have tightened further after China and Thailand halted jet fuel exports and South Korea capped shipments at previous levels.

Walsh said a resumption of crude flows could encourage exporters such as China and South Korea to restart shipments of refined products, easing pressure on the market over time.

However, he noted that higher refinery margins, known as crack spreads, would be needed to incentivize increased jet fuel production.

“There is capacity available once we get the crude oil flowing, but it’ll take a little bit of time,” Walsh said.