Oil Surges Past $123 as Bridge Strike and War Escalation Send Global Markets and Airlines Into Crisis

Russian Urals crude hit $123.45 a barrel on Thursday and Brent surged above $109 after the destruction of Iran’s tallest bridge and Trump’s promise of two more weeks of intensified strikes. Airlines from Air New Zealand to Vietnam Airlines are cutting flights as jet fuel prices more than double. The global airline industry, which forecast record $41 billion profits for 2026 before the war, is now scrambling to survive.

Before the Iran war began on February 28, the global airline industry expected 2026 to be the best year in its history. Carriers had forecast collective profits of $41 billion, driven by record passenger demand and falling fuel costs. Five weeks later, jet fuel has more than doubled in price, flights are being cancelled across Asia and the Pacific, and the question is no longer how much money airlines will make but how many will survive.

The numbers

Russian Urals crude, the benchmark that matters most to refiners outside the United States, surged to $123.45 a barrel on Thursday evening — a 6.4% jump in a single session. Brent crude rose above $109, up nearly 8% since Trump’s primetime address on Wednesday night. The trigger was the destruction of the B1 bridge near Tehran, which markets interpreted as confirmation that Trump’s promised “most intense phase” of the campaign has begun.

These are prices the world has not seen since the worst days of 2022, when Russia’s invasion of Ukraine sent energy markets into chaos. But the current crisis is worse in one critical respect: the Strait of Hormuz remains closed. Twenty percent of the world’s oil supply is effectively offline. No amount of strategic reserve releases or Saudi production increases can fully compensate for that loss.

The airline crisis

Airlines are the canary in the oil-price coal mine. Fuel typically accounts for 25–30% of an airline’s operating costs. When jet fuel doubles, margins evaporate. Air New Zealand has cut its long-haul schedule by 15%. Vietnam Airlines has cancelled domestic routes. Philippine Airlines, already weakened by the Southeast Asian energy emergency, has suspended all international flights except to Tokyo and Singapore.

European carriers are faring slightly better thanks to hedging contracts signed before the war, but those hedges expire in the coming months. Ryanair’s Michael O’Leary warned that summer fares would rise by 20–30% and that smaller European carriers faced “extinction-level” fuel costs. In the United States, where airlines hedged less aggressively, Delta and United have both issued profit warnings.

The broader picture

Oil is not just fuel. It is fertiliser, plastics, pharmaceuticals, and shipping. When oil passes $120, the effects cascade through every sector of the global economy. Food prices rise because transport costs rise. Manufacturing slows because input costs rise. Central banks face impossible choices between fighting inflation and supporting growth.

The International Energy Agency warned last week that every $10 increase in the oil price above $100 shaves approximately 0.3 percentage points off global GDP growth. At current prices, the war has already cost the world economy roughly 0.7 percentage points of growth — the equivalent of wiping out the entire annual output of a mid-sized European country.

Trump has promised the oil will come “tumbling down” when the war ends. But the war is not ending. It is escalating. And every bridge that falls, every refinery that burns, and every threat that widens the conflict pushes oil higher and the global economy closer to a recession that no central bank can prevent.