War in Iran Grounds Global Air Cargo: Demand Falls Nearly 5% in First Month
The first month of the Iran conflict sent shockwaves through global air freight, with demand dropping nearly 5% as major Middle Eastern airports shut down. According to IATA, total cargo tonne-kilometers (CTKs) fell 4.8% compared to March 2025, while international operations took an even harder hit at minus 5.5%.
Middle Eastern carriers—Qatar Airways, Emirates, and Etihad—suffered a staggering 54.2% plunge in demand after airports in Doha, Dubai, and Abu Dhabi grounded flights. Meanwhile, Asia-Pacific airlines saw a 5.4% boost as shippers rerouted around the conflict zone. Industry capacity also shrank 4.7%.
“The post-Lunar New Year slowdown added to the decline,” said IATA’s Willie Walsh. “But underlying demand still looks strong, and trade and GDP forecasts remain positive for 2026.”
The real pain is in fuel. Jet fuel prices more than doubled year-over-year to $183.70 per barrel—the highest in over two decades—as traffic through the Strait of Hormuz nearly halted. That strait normally carries 20% of the world’s daily oil and gas supply. Cargo yields rose 18.9% year-over-year to $2.75 per kilogram, driven by supply constraints and shippers fleeing disrupted sea freight.
“All eyes are on fuel supply and price,” Walsh added. “The industry’s resilience will be tested in coming months.”
Though a ceasefire is in place, Iran’s threats on Hormuz and a U.S. naval blockade of Iranian ports keep oil prices elevated. Crude futures hit $106.78 a barrel on Wednesday, up 6.6% in a single day. President Trump told Axios the blockade will stay until Iran addresses U.S. nuclear concerns.
“Airfares and cargo costs are going up, hitting pharma, electronics, and high-value goods,” said Beroe’s Arun Lawrance. The U.S. has about 25 days of jet fuel supply; Europe has three to six weeks. If the disruption lasts a month, North America will see higher prices but adequate supply. At two months, supply tightens. At three months, summer demand and refinery issues pose “moderate” risk to U.S. carriers. Europe faces a far steeper climb: manageable for two weeks, then visible tightening, and by week six, a high risk of shortages if the Hormuz crisis persists.