Middle East Conflict Disrupts Aviation Supply Chain and Fuel Prices in 2026

This article is based on an official press release from Locatory.

The escalation of the Middle East conflict in early March 2026 has severely disrupted the global aviation ecosystem, triggering widespread airspace closures and a historic surge in jet fuel prices. As regional instability reshapes the global parts and logistics network, routine procurement has shifted into a highly dynamic, risk-sensitive operation.

According to an official press release from Locatory, the central Middle East corridor is effectively non-operational for routine commercial traffic as of late March 2026. The disruption has constrained supply chain flows, increased transit complexity, and placed sustained pressure on MRO networks worldwide.

With established trade lanes forced to reroute through longer and less efficient corridors, the aviation industry is facing a massive reduction in air cargo capacity. This bottleneck has left critical aircraft parts stranded in transit, delaying aircraft returns to service and extending Aircraft on Ground (AOG) events across the globe.

The Operational Airspace Picture and Rerouting

Following drone and missile incidents in the UAE and Qatar, authorities have closed large portions of regional airspace across Iran, Iraq, Kuwait, and Syria. Locatory.com reports that surrounding areas, including Israel, Bahrain, Saudi Arabia, and Oman, are operating under varying restrictions and conditional access.

Consequently, Europe–Asia flight corridors have been forced to reroute. Traffic is now primarily concentrated into two constrained paths: a southern route via Egypt and Saudi Arabia, and a northern route via the Caucasus. Both options add several hundred miles to standard Gulf routings, directly increasing flight times and operating costs.

Flight Suspensions and Bottlenecks

Major airlines have drastically reduced or suspended services to key regional destinations. According to Locatory.com, Cathay Pacific has extended the suspension of passenger flights to Dubai and Riyadh until May 31, 2026. Air Baltic has suspended Dubai operations until October and Tel Aviv services into late April, while Aegean Airlines canceled services across multiple Middle Eastern destinations into May.

The rerouting has created severe bottlenecks. Industry estimates (AirPro News research) indicate that carriers are aggressively pivoting to direct Asia–Europe flights, squeezing roughly 23% of global demand into a narrow 150km-wide corridor over Azerbaijan.

Air Cargo Capacity and Freight Rates

The Middle East has long served as a central transshipment hub for global aviation. In 2025, the Europe–Asia corridor accounted for 21.5% of global air freight, with Dubai International Airport handling over 1 million tons of cargo in the first half of the year alone, according to Locatory.com.

The conflict’s impact on logistics has been immediate. Locatory.com notes that by mid-March 2026, global air cargo capacity had contracted by approximately 22%, with freight prices increasing up to four times compared to pre-conflict levels. Industry estimates (AirPro News research) further reveal a deficit of over 520,000 tonnes of international cargo capacity within a two-week window, with capacity on the Asia–Middle East–Europe corridor declining by 39%.

The Squeeze on Aircraft Parts

The capacity squeeze has driven up freight rates significantly. Industry estimates (AirPro News research) show that global air cargo spot rates jumped 10% week-on-week in mid-March, while rates from India to Europe surged by approximately 80%, and prices from Hong Kong to Europe cleared $5.15 per kilogram.

For the aviation supply chain, this means critical components are stranded. In 2025, 6.7% of global aerospace air shipments moved to or from the Middle East, according to industry estimates (AirPro News research). Locatory.com states that transit times for aviation parts have increased by an estimated 20% to 40%, directly impacting time-critical shipments such as engine rotables and avionics components.

“[There is] an absolute halt of the supply chain to the Middle East.”

MRO Network Strain and Stranded Assets

The Middle East houses a dense MRO infrastructure. Locatory.com values the regional MRO market at roughly $10.55 billion in 2026, supported by a network of 25 to 30 major tier-one providers operating more than 100 large-scale facilities.

Logistical constraints are holding aircraft, engines, and components in storage or at MRO facilities. Locatory.com highlights that operators must preserve these stranded assets under controlled conditions, generating significant costs that can reach several thousand dollars per unit without producing revenue. Furthermore, war risk premiums have risen sharply in areas near conflict zones, in some cases by 50% to 500%.

Shifting Maintenance Hubs

With the steady inflow of components disrupted, MRO activity is gradually shifting toward lower-risk jurisdictions like Turkey and parts of Saudi Arabia. Locatory.com notes that this sudden shift is creating new bottlenecks and extended queue times in those locations.

Amyr Qureshi, SVP at Aventure Aviation, highlighted the domino effect of delayed parts, noting that grounded aircraft must remain airworthy for when airspace reopens.

“If the part doesn’t arrive on time the airplane sits in the hangar more.”

Surging Fuel Prices and Airline Economics

The conflict has caused one of the most severe fuel shocks in aviation history. The Strait of Hormuz, which saw roughly 20 million barrels of crude oil and petroleum products pass daily in 2025, is now largely closed to commercial traffic, reducing tanker movements by 70% to 80%, according to Locatory.com.

Jet fuel prices have surged significantly since late February 2026, rising from around $87 to between $150 and $200 per barrel. Locatory.com notes this as an over 60% increase, while industry estimates (AirPro News research) place the spike between 76% and 135%. Locatory.com explains that rerouted flight paths add up to two hours on long-haul sectors, increasing fuel burn by around 20% while carriers pay 80% to 100% more per gallon.

To preserve liquidity, airlines are deferring non-critical shop visits and extending the time on wing for engines and components. However, as fuel becomes more expensive, even small declines in efficiency translate into disproportionately higher operating costs.

AirPro News analysis

We observe that the compounding effects of airspace closures, surging fuel costs, and stranded assets are forcing a broader realignment of global air cargo flows and MRO networks. While the immediate impact on global MRO demand appears manageable, we note that a prolonged conflict could force airlines to retire older, maintenance-heavy aircraft due to high operating costs.

Major manufacturers like Boeing are already asking suppliers to evaluate their exposure to the region’s shipping and logistics routes, as even minor delays risk disrupting assembly schedules. To navigate this constrained environment, we see aviation stakeholders prioritizing real-time inventory visibility and forward-positioning critical components. Digital aviation marketplaces are becoming increasingly vital for operators to track supply across multiple hubs and source available parts outside of traditional, now-disrupted trade lanes.

Ken Herbert, Analyst at RBC Capital Markets, views the conflict as a risk to global travel but remains cautious about immediate sector-wide disruptions.

“…we do not see a meaningful impact on the MRO industry in the short term.”

Frequently Asked Questions (FAQ)

How much have jet fuel prices increased due to the 2026 Middle East conflict?
According to Locatory.com, jet fuel prices surged over 60% since late February 2026, rising from approximately $87 to between $150 and $200 per barrel.

Why are aircraft parts delayed?
Airspace closures have forced cargo flights to reroute, reducing global air cargo capacity by approximately 22% by mid-March 2026. Locatory.com reports that transit times for aviation parts have increased by 20% to 40%.

How is the MRO sector responding?
MRO activity is shifting from conflict-adjacent zones to lower-risk jurisdictions such as Turkey and parts of Saudi Arabia, though this is creating new capacity constraints and extended queue times in those areas.

Sources

• Locatory.com