What higher oil prices mean for Australian airlines and ticket prices

Crude oil price swings: a response to geopolitical upheavals

The wild ride in the energy complex continued overnight and into the start of the session in Asia, with West Texas Intermediate (WTI) crude oil slipping below $80 for the first time this week before rebounding.

The sell-off that took it below $80 followed a now-deleted post from United States (US) Energy Secretary Chris Wright, claiming the US Navy had successfully escorted an oil tanker through the Strait of Hormuz. After hitting a low of $76.73, the White House quickly walked back the claim as false.

However, prices didn’t stay down for long. Crude rebounded sharply above $88 on intelligence reports that Iran was preparing to lay naval mines in the Strait. That threat was swiftly handled when the US military eliminated 16 Iranian mine-laying vehicles in the area.

The rollercoaster continued this morning as the Wall Street Journal reported that the International Energy Agency (IEA) is proposing the largest release of oil in its history to help offset supply disruptions from the Middle East conflict.

After all those twists and turns, crude oil seems to be finding a level for the time being, trading in the mid-$80s, some 29% below Monday’s $119.48 panic high, but still approximately 26% above where it ended February.

The impact on Australian airlines and ticket prices

Following the rise in oil prices since the start of the conflict, the specific fuel that powers Qantas and Virgin Australia aircraft – Singapore jet kerosene (Jet A-1) – is trading at $142.92. This is approximately 60% above its 200-day moving average (MA) of $89.30, though admittedly well below the earlier $225 level this month.

For airlines operating out of Australia, that number matters immensely. Australia imports almost all of its jet fuel, and Singapore acts as the pricing benchmark. Fuel typically makes up 25% to 35% of an airline’s total operating cost.

The initial surge in prices had already put upward pressure on fares, especially on long-haul routes to Europe and the US where fuel burn is heaviest. Qantas has increased fares on its international routes this week, explicitly citing the surge in jet fuel costs. Jetstar, part of the Qantas Group, has followed suit with similar increases. Virgin, which is predominantly a domestic carrier, is reported to be assessing the situation.

Breathing room for carriers and passengers?

The recent retreat in oil prices offers airlines some much-needed breathing room following the sharp surge seen earlier in the week.

This relief is further compounded by the airlines' hedging strategies. Qantas typically hedges around 70% to 90% of its forward fuel needs, with Virgin following a similar approach. It would be surprising if they weren’t in the market currently taking the opportunity to hedge some exposure during the current pullback.

Looking ahead, if the oil price – and by extension, the price of jet fuel – can stabilise around current levels rather than retesting recent extremes, it significantly reduces the urgency for aggressive, across-the-board fare hikes in the weeks ahead. This, in turn, will come as a welcome relief for Australian flyers contemplating their next holiday.

Singapore Jet Kerosene chart

Qantas technical analysis

The Qantas share price embarked on an impressive rally from a Covid-19 low of $2.03 to hit a high of $12.62 in August last year, a surge of over 500%. However, after peaking at $12.62, the stock has since pulled back by more than 35% in what appears to be a clear corrective move.

The current correction is approaching a very important layer of support at $7.55 – $7.30, originating from the April 2025 low and the 200-week MA.

Should Qantas successfully hold above this key support and then rebound above resistance at $9.30 – $9.50, it would maintain a constructive technical picture, setting the stage for a retest and eventual break of its $12.62 record high.

Qantas weekly candlestick chart

• _{Source: TradingView. The figures stated are as of 11 March 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}