Airfares are surging. In the three weeks since the conflict in the Middle East began, jet fuel prices have nearly doubled. Average domestic fares have climbed sharply, and on some routes the cost of a ticket has more than doubled. For any corporate travel programme this is a significant and unwelcome cost increase, arriving without warning and with no clear end date.
The natural question that follows is whether sustainable aviation fuels are any different. If conventional jet fuel has become structurally more expensive, does SAF start to look more competitive, and are SAF prices themselves exposed to the same forces driving this spike?
The short answer: the gap between SAF and conventional jet fuel will temporarily narrow, because conventional fuel has spiked while SAF costs have moved far less. But this is unlikely to translate into any meaningful change in what corporate travel buyers actually pay for SAF. And it makes the case for renewable energy investment far more compellingly than any policy argument has managed.
Why conventional jet fuel is spiking so sharply
Aviation fuel is priced almost entirely off crude oil. When US and Israeli strikes disrupted Iran's oil infrastructure and effectively halted tanker traffic through the Strait of Hormuz, crude crossed $100 per barrel for the first time in nearly four years.
Because jet fuel accounts for roughly 40% of an airline's operating costs, that increase flows almost directly through to ticket prices. Airlines have very limited short-term ability to absorb the shock. Many have already raised fares and cut routes. Analysts expect prices to remain elevated for months even if the conflict de-escalates, as hedging positions and supply chains take time to normalise.
Is SAF more resilient? Yes, but with important caveats
The dominant form of SAF in production today is HEFA — fuel derived from biological feedstocks like used cooking oil, animal fats, and vegetable oils. These feedstocks are priced by agricultural commodity markets, not crude oil. When the Strait of Hormuz closes and Brent crude spikes, that does not directly reprice used cooking oil or tallow.
This structural decoupling is real and it matters. SAF does not carry the same direct exposure to geopolitical oil supply shocks that conventional jet fuel does. That said, SAF is not fully insulated. Energy inputs, feedstock price creep, and supply chain costs all edge upward — but far less acutely than conventional fuel.
The net effect is that SAF costs are moving upward modestly, while conventional jet fuel has spiked. The relative gap has narrowed. But this narrowing is unlikely to be felt by organisations actually buying SAF. The reason is structural: SAF buyers pay the cost of conventional jet fuel as a baseline, then pay a separate SAF premium on top. That premium is set by supply scarcity, policy mandates, and production economics — not by crude oil. So even as the notional gap narrows, the premium buyers are actually asked to pay is unlikely to move materially downward.
What does this mean for SAF adoption?
The narrowing of the relative price gap is interesting, but it does not automatically translate into a wave of new SAF adoption. Airlines are under acute financial pressure and are not in a position to sign large new long-term SAF supply agreements. SAF supply remains deeply constrained regardless of demand signals — SAF represented less than 1% of global aviation fuel consumption even before this crisis. New production facilities take three to four years to build.
The more significant effect is likely political and strategic rather than narrowly economic. The energy security argument for SAF — long considered a theoretical benefit — has become viscerally real. An airline or corporate with SAF offtake agreements in place today is materially less exposed to this kind of geopolitical shock. That argument lands very differently in boardrooms now than it did three months ago.
The real lesson: why renewable energy investment matters more than ever
The price of generating one kilowatt-hour of electricity from solar power has not changed because of the war in Iran. The price of generating one kilowatt-hour from oil has skyrocketed.
Solar was already the cheapest form of energy generation before this crisis began. What the crisis has done is dramatically widen that advantage. Renewable energy costs are set by engineering and capital, not by geopolitics. Fossil fuel costs, by contrast, are permanently exposed to exactly this kind of disruption.
This matters for SAF directly. The most energy-intensive part of producing SAF is the process energy — heat, hydrogen, refining. If that energy comes from renewables, it is priced off a stable and declining cost curve. If it comes from fossil fuels, it is priced off a curve that has just demonstrated, again, how violently it can move.
Investing in renewable energy is the single most powerful lever for bringing down the long-term cost of SAF. The case for accelerating clean energy investment was already strong on climate grounds. The Iran crisis has made it compelling on pure economic and security grounds too.
Our view
SAF is not a short-term hedge against this oil price shock, and the crisis will not meaningfully lower the premium that buyers pay today. But the fundamental case for it has just been made more compellingly than any policy paper could manage.
For organisations building travel programmes with a view to the next five to ten years, the lesson is one the energy sector keeps relearning: dependence on fossil fuel supply chains is a financial risk, not just an environmental one. SAF, alongside demand-reduction strategies, is part of how aviation eventually escapes that exposure.
If you're exploring how to reduce your programme's exposure to fuel cost volatility — through modal shift, booking behaviour, or emissions tracking — our Thrust Calculator and EngageAI platform are a good place to start.