Ryanair fuel costs are carving a deeper hole in the Irish carrier’s finances than headline figures suggest, with first-quarter pre-tax profits dropping 34% to €593 million for the April-to-June period as unhedged jet fuel bills more than doubled and passengers held back on bookings.
The airline blamed a combination of geopolitical shock and consumer hesitancy. War between the United States and Iran has sent crude prices sharply higher, and Ryanair was forced to cut fares to keep seats filled, leaving revenue essentially flat year on year.
How the Strait of Hormuz Is Driving Ryanair’s Fuel Bill
The scale of the supply shock helps explain why Ryanair fuel costs are proving so difficult to contain. According to Institute for Energy Research analysis of US government data, crude oil and petroleum liquids transiting the Strait of Hormuz fell almost 30% year-on-year in the first quarter of 2026, dropping to 14.6 million barrels per day from 20.4 million a year earlier: a reduction of nearly 6 million barrels per day.
The US Energy Information Administration (EIA) confirmed that Brent crude began the second quarter of 2026 above $100 per barrel as Middle Eastern producers shut in output in response to the disruption. Overnight on Monday, Brent had already climbed 2.5%, surpassing $90 a barrel for the first time in a month, according to the snippet. The EIA’s April 2026 Short-Term Energy Outlook puts the March 2026 Brent average at $103 per barrel and forecasts a peak of $115 per barrel in the second quarter before production shut-ins slowly ease.
If that trajectory holds, Ryanair’s hedging programme will matter enormously. The carrier said it had locked in prices for most of its forward fuel needs, but those outside the hedges have more than doubled. An airline that burns roughly €5.4 billion worth of fuel in a full year, as the Ryanair Annual Report for the year ended March 2026 shows, faces material exposure on even a modest unhedged slice when prices are moving at this speed. Full-year fuel costs in that annual report reached €5,419 million, up from €5,220 million the prior year, against total revenue of €15,544 million.
Summer Fares and the Sensitivity Warning
Ryanair’s guidance for the peak July-to-September period is subdued. Fares are ‘trending modestly down’ on the same stretch last year, the company said, with consumer hesitancy around air travel cited as the culprit. The airline warned that full-year results will be ‘highly sensitive’ to conflict escalation in the Middle East and Ukraine, and to the price of any jet fuel not covered by its hedging deals.
That warning deserves to be read carefully. Shane Oliver, head of investment strategy at fund manager AMP, framed the tail risk plainly: ‘The longer the strait remains closed and the war escalates, the greater the risk that oil prices will have to rise to around $150 a barrel to bring demand down to match the hit to supply.’ He added: ‘This is not our base case but it’s a high risk again.’
The base case, in other words, is not $150. But it is also not $90. The EIA’s central forecast already puts Brent above $100 through most of the second quarter, and that alone is enough to keep pressure on any airline whose hedges do not cover the full book.
Ryanair’s business model has historically treated rock-bottom fares as its structural advantage. When fares must be cut to stimulate demand at precisely the moment fuel costs are rising, both levers are working against the margin at once. The first-quarter earnings call gave little comfort on either front.
The binary here is straightforward: if the Strait of Hormuz reopens meaningfully before the summer ends, oil retreats and Ryanair’s hedges carry the company through a bad quarter. If the strait stays effectively closed into the autumn, the EIA’s $115 peak scenario becomes a floor rather than a ceiling, and the full-year profit outlook shifts from ‘sensitive’ to something considerably worse.
