A leading global credit rating agency has warned Australian airlines would be among those most heavily impacted if the Iran war causes prolonged supply chain disruption of jet fuel.
Morningstar DBRS released its report just before the US and Iran reached a two-week ceasefire agreement, which included a pledge by Iran to reopen the Strait of Hormuz during the halt in fighting.
Since the war began on February 28, jet fuel prices have nearly doubled, with airlines passing the cost on through ticket increases.
LIVE UPDATES: Iran closes Strait of Hormuz again in response to Israeli attacks in Lebanon
Analysts say carriers with aggressive fuel hedging — a risk management strategy to lock in prices — should be better protected in the near term.
But if global supplies of aviation fuel run low, other airlines will be exposed.
"Beyond price pressures, a prolonged supply chain disruption in the Middle East —combined with export restrictions by key jet fuel suppliers such as China — raises the risk of physical jet fuel shortages in certain regions," the report says.
"In such a scenario, airlines with greater reliance on imports from affected regions are likely to be most exposed, including carriers in Australia, Asia, and some European markets."
Airlines around the world have been grappling with volatile oil markets as fighting near the Strait of Hormuz disrupts global supplies.
Roughly a fifth of the world's oil typically passes through the narrow water way, and the threat to that chokepoint is pushing up the price of jet fuel, which is refined from crude.
Fuel typically ranks as the second-largest expense for airlines after labour.
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