Global Oil Crisis Drives Demand for Sustainable Aviation Fuel Amid Rising Jet Fuel Costs

The conflict in Iran has intensified global oil supply pressures, driving up fuel costs across multiple sectors. While much of the attention has focused on gasoline—where average prices have surged over $1 per gallon since the war began, reaching $4 a gallon for the first time in four years—jet fuel has experienced an even steeper increase.

In the U.S., airlines spent 56% more on fuel in March 2024 compared to February, according to the Bureau of Transportation Statistics. Jet fuel prices have roughly doubled in the same period, mirroring the volatility seen in gasoline markets. This instability has highlighted the vulnerabilities of relying on traditional fossil fuels, particularly in industries like aviation where fuel is a top operational cost.

For years, the push for sustainable alternatives like electric vehicles (EVs) has been framed around environmental benefits. However, the current oil crisis is demonstrating another critical advantage: resilience against geopolitical shocks. The airline industry is now turning to sustainable aviation fuels (SAFs) as a potential solution to both cost volatility and emissions reduction.

Why Airlines Are Embracing Sustainable Aviation Fuels

United Airlines CEO Scott Kirby, a vocal advocate for climate action, has long championed SAFs—not just as an environmental tool but as a strategic financial hedge. In a recent statement, Kirby emphasized the dual benefits of SAFs:

"Sustainable aviation fuel is not just for sustainability. I tell everyone [jet fuel is] our biggest cost. It’s our most volatile cost. …and guess what happened?"

Kirby’s remarks underscore a growing recognition that SAFs can stabilize fuel expenses while reducing carbon footprints. The argument is echoed by industry leaders like Chris Cooper, CEO of XCF Global, a sustainable aviation fuel company. Cooper notes that SAFs offer more than just lower emissions:

"SAF not only supports emission reductions and propulsion for aviation, but also strengthens fuel security and reduces exposure to these external shocks."

XCF Global’s refinery in Reno, Nevada, produces SAF using domestic waste feedstocks, transforming fuel from a global commodity subject to geopolitical risks into a more localized and stable resource.

Scaling Up SAFs Faces Major Challenges

Despite the clear advantages, SAFs remain a tiny fraction of airlines’ fuel consumption. United Airlines, a leader in SAF adoption, has invested in the production of more than 5 billion gallons of SAF. Yet, as of December 2024, SAF accounted for just 0.3% of the airline’s total fuel use, according to its latest impact report. The slow adoption reflects both production limitations and economic barriers.

Kirby has called for government incentives to accelerate SAF production, comparing the need to the successful policies that boosted wind and solar energy. The Inflation Reduction Act provided a starting point by offering tax credits and grants to make SAFs more cost-competitive with conventional fuels. However, these incentives were later reduced by President Donald Trump’s One Big Beautiful Bill Act, which cut the tax credit from $1.75 per gallon to $1 per gallon—a move that industry experts warn could slow progress.

Political Shifts Complicate Climate Commitments

The pushback against sustainability goals extends beyond U.S. borders. In April 2024, Delta Airlines removed several environmental targets from its sustainability webpage, including its pledge to use SAF for 10% of its jet fuel by 2030. Similarly, Air New Zealand abandoned its 2030 climate goals in 2024, signaling a broader retreat from ambitious environmental targets.

Kirby acknowledges that many airlines set their climate goals with a 2030 deadline in mind, but warns that political and economic uncertainties are forcing a reevaluation of these commitments. The tension between short-term financial pressures and long-term sustainability remains a defining challenge for the aviation industry as it grapples with the realities of a volatile fuel market.