The 2026 U.S.-Iran War and the Global Energy Crisis

Chapter 18: Aviation Halted First

18.1 Cebu Pacific and Philippine Airlines' Route Reduction

The afternoon of March 24, 2026, at Manila's Ninoy Aquino International Airport Terminal 3. The departure boards were covered in red text. CANCELED. CANCELED. CANCELED. Cebu Pacific's Manila-Cebu flight at 2:40 p.m. Canceled. Manila-Davao at 3:15 p.m. Canceled. Manila-Palawan at 4:00 p.m. Canceled. The terminal floor was a tangle of families sitting with backpacks, businessmen talking loudly into their phones, and mothers in line at the counter holding their children. That day, Cebu Pacific and Philippine Airlines abruptly canceled a significant number of domestic and international flights.

At the same moment, at Malacañan Palace, President Ferdinand Marcos Jr. signed Executive Order No. 110. Declaration of a national energy emergency. It was the moment the Philippines became the first nation in the world to declare an energy emergency in response to the Iran war.

Marcos' remarks in an interview with Bloomberg Television were brief and direct. "Several countries have notified us that they cannot supply fuel to our airlines. So aircraft must carry a full round-trip fuel load from their departure points." And he added: "Aircraft being grounded is a sufficiently realistic possibility."

Jet fuel (Jet A-1, a kerosene-type fuel used in aircraft) is a fuel that demands extremely rigorous quality standards among middle distillates extracted from crude oil. It must not freeze at minus 50 degrees in the stratosphere, and impurities must be nearly perfectly removed. Asian airlines had obtained most of this fuel either by refining crude oil from the Middle East or by importing finished products from Middle Eastern refineries. When the Strait of Hormuz was closed, this entire supply chain was cut off.

Refineries made a cold calculus. With crude oil supplies dwindling, they adjusted the valves in their distillation towers to prioritize diesel and heating oil production while reducing jet fuel output. In this process, known as yield shift,a decision about what products to extract more of from the same amount of crude,jet fuel was the first product to be sacrificed. When you stop trucks, people go hungry, but when you stop planes, no one dies immediately.

The Philippines suffered this blow earlier and more severely than any other nation. There were three reasons.

First, the Philippines' oil self-sufficiency rate was near zero. The only operating refinery in the country was the Petron facility on the Bataan Peninsula, and it could meet only 40 percent of domestic fuel demand. The remaining 60 percent was imported as finished products from refineries in South Korea, Singapore, China, and Malaysia. Yet 70 to 80 percent of the crude oil these countries' refineries used came from the Persian Gulf through the Strait of Hormuz. With the strait closed, the countries that could sell fuel to the Philippines essentially ceased to exist.

Second, the Philippines had no strategic petroleum reserve (SPR). The reserve figures Energy Secretary Sharon Garin disclosed to the Senate were not government-owned reserves but commercial inventory held by private refiners and distributors. Under the Oil Deregulation Law enacted in the 1990s, private companies' legally mandated reserve was just 15 days of supply.

Third, the Philippines is an archipelago of 7,641 islands. Among the modes of transport connecting these islands, aviation is not a luxury but a lifeline. Cities like Cebu, Davao, Palawan, Boracay, and Mindanao are connected to Manila by air, and when these connections break, medical supply transport, emergency relief, and industrial logistics all seize up simultaneously.

Cebu Pacific announced route reductions and flight frequency cuts from April through October. With jet fuel prices soaring to more than double the 2025 average, the low-cost carrier's margins could not sustain continued operations. Philippine Airlines also halted all Middle Eastern routes. Flights to Riyadh, Dubai, and Doha were all suspended. On March 25, Philippine Airlines announced it had secured jet fuel through the end of June but added it could guarantee nothing beyond that. No one missed what the airline's statement meant when it said "the current global supply situation is dynamic",it meant "we don't know either."

The jet fuel shortage shook another pillar of the Philippine economy: overseas Filipino workers (OFWs). Millions of Philippine workers laboring in the Middle East, Hong Kong, Taiwan, and Singapore and remitting dollars home were this country's hidden engine. In 2025, overseas remittances exceeded $37 billion. But with planes grounded, workers could not depart. Workers whose contracts were expiring crowded around Manila Airport, unable to board. Some had to abandon their travel plans and return home. When remittances stopped, families' living expenses stopped. When expenses stopped, domestic consumption declined. When consumption declined, small business owners collapsed.

Resorts in Boracay and Cebu emptied. Tourism workers entered unpaid leave. Photos circulated on social media of Cebu Pacific aircraft, marked with yellow tail fins, lined up on one side of the runway. Someone commented on one of these photos: "When a bird loses its wings, it's just a chicken." In the Philippines, aircraft were birds. And in March 2026, these birds' wings were broken.

It was not just the Philippines' story.

On March 25, Bloomberg reported signs of jet fuel hoarding across Asia. Korean airlines received notices of fuel refusal at some overseas airports. South Korea's Ministry of Land, Infrastructure and Transport began discussions about redirecting export jet fuel to the domestic market. The president of Philippine Airlines revealed in an interview that they were reviewing fuel rationing. Vietnam's Civil Aviation Administration warned that jet fuel shortages could begin in early April.

Vietnam's situation was no less serious than the Philippines'. Vietnam imported more than two-thirds of its jet fuel, and 60 percent of that came from China and Thailand. But China had halted refined oil exports in March, and Thailand too had restricted refined petroleum product exports. Vietnam's two major jet fuel importers, Petrolimex and Skypec, announced they could guarantee supply only for March. They could not promise volumes after April.

On March 9, Vietnam's Civil Aviation Administration sent an urgent memo to the Ministry of Transportation. "There is a risk of jet fuel shortage for Vietnamese airlines beginning in early April." The memo instructed airlines to review their flight plans and told airport operators to secure additional parking spaces for grounded aircraft.

On March 23, Vietnam Airlines announced it would suspend 23 weekly domestic flights starting April 1. Hai Phong-Buon Ma Thuot, Hai Phong-Cam Ranh, Hai Phong-Phu Quoc, Hai Phong-Can Tho, Ho Chi Minh-Ban Don, Ho Chi Minh-Lak, Ho Chi Minh-Dien Bien. Most of these routes connected tourist destinations. Beach resorts in Phu Quoc, Mekong Delta tours in Can Tho, and historical tours in Dien Bien came to a halt due to jet fuel shortage. Viet Jet Airways also trimmed some routes. According to Civil Aviation Administration documents, when jet fuel prices reached $160 to $200 per barrel, Vietnam Airlines planned to cut an additional 10 to 20 percent of monthly flights. This meant potential cancellations of up to 18 percent of international flights and up to 26 percent of domestic flights.

On March 15, Vietnamese Foreign Minister Le Hoai Trung asked Chinese Foreign Minister Wang Yi for energy security cooperation. Prime Minister Pham Minh Chinh met with the Thai ambassador to request jet fuel supply support. The Civil Aviation Administration said it was seeking alternative sources from South Korea, Japan, Brunei, and India, but acknowledged that finding new suppliers in the current market situation was extremely difficult.

On March 21, Vietnam signed a petroleum and gas production cooperation contract with Russia. And that same week, gasoline prices had risen 50 percent since the war's outbreak, and diesel had risen 70 percent.

On March 18, SAS, the Scandinavian airline, announced it would cancel at least 1,000 flights in April. CEO Anko van der Werff was terse: "Jet fuel prices doubled in ten days." SAS operates about 800 flights daily. In normal times, 1,000 flights would be half a day's schedule. But SAS' decision drew attention not for its scale but for its reason: it was the first major European airline to cut routes purely for fuel costs. Air New Zealand also announced it would cut 5 percent of all flights, about 1,100 flights, from March 12 through early May. United Airlines CEO Scott Kirby wrote in a message to staff: "Here is the reality: Jet fuel prices have more than doubled in three weeks."

Here are the figures on the jet fuel crisis. According to the International Air Transport Association (IATA) Fuel Price Monitor, global average jet fuel prices rose 82.8 percent in a single month, reaching $175 per barrel. The U.S. Energy Information Administration (EIA) raised its forecast for 2026 average jet fuel prices to $2.67 per gallon, 37 percent higher than previous projections. Jet fuel, which normally accounts for 25 to 30 percent of airline operating costs, began to exceed 40 percent. Cathay Pacific CEO Ronald Lam disclosed that March jet fuel costs were double the previous two months' average. Cathay Pacific had hedged only 30 percent of its crude exposure,its refining cost portion had no hedging at all.

Korean airlines were no exception. In April, Korean Air raised its international fuel surcharge to a maximum of 303,000 won per leg,more than triple the March maximum of 99,000 won. Asiana Airlines also raised it to a maximum of 251,900 won. Jeju Air hiked surcharges by more than three times depending on the route. The Incheon-Fukuoka fuel surcharge went from $9 to $29; Incheon-Singapore climbed to $68. The Seoul Economic Daily reported that "fuel surcharges alone on an Incheon-New York round trip could reach 500,000 won."

Jin Air cut 45 flights in April on routes such as Guam and Nha Trang. Air Premia reduced about 50 flights on Los Angeles, San Francisco, Bangkok, and New York routes in April and May. Air Busan, Esteem Air, and Aero K also reduced or suspended routes to Southeast Asia and Japan. On March 31, Korean Air announced it was entering emergency management mode,the third airline after T'way Air and Asiana Airlines. Korean Air's original business plan had assumed jet fuel at 220 cents per gallon. The actual price was surpassing 450 cents.

Korea Herald reported that May fuel surcharges could reach the highest of 33 levels. The previous record was level 22 during the 2022 Russia-Ukraine war.

What one Seoul household head told the Seoul Economic Daily compressed this situation. Mr. A, who had planned a Tokyo trip the following month to celebrate his mother's birthday, checked an airline reservation website and was shocked. Fares that had been in the 300,000-won range on weekdays had jumped to 500,000 won. "For a family of four, that's an additional 800,000 won. I'm just considering canceling the trip."

18.2 Complete Halt of Middle East Routes

Saturday night, February 28, 2026: Iran, Israel, Iraq, Jordan, Qatar, Bahrain, Kuwait, and the United Arab Emirates simultaneously closed their airspace. Syria also shut its southern airspace near the Israeli border for 12 hours. That day, 24 percent of flights to the Middle East were canceled. Flights to Qatar and Israel saw half cancelled, Kuwait flights lost 28 percent. According to aviation data analyst Cirium.

By March 3, more than 12,300 flights had been canceled at seven major Middle Eastern airports: Dubai International, Hamad International (Doha), Zayed International (Abu Dhabi), Sharjah International, Kuwait International, Bahrain International, and Dubai World Central-Al Maktoum International. According to Flightradar24. By mid-March, cumulative cancellations surpassed 20,000 flights.

These numbers meant something. Dubai International Airport had been the world's busiest international airport, serving 95.2 million passengers in 2025. Hamad International in Doha served 54.3 million; Zayed International in Abu Dhabi served 33 million. The three airports combined handled 182.5 million passengers annually,an average of 500,000 per day passing through them. When these airports stopped or drastically cut operations, a hole opened in the global aviation network. CNN called it "the hole in the sky."

Over 30 years, Emirates (Dubai), Qatar Airways (Doha), and Etihad (Abu Dhabi) had built global transit hubs connecting Asia, Europe, and Africa. Aviation consultant Mike Arnot explained: "Over 30 years, Middle Eastern airlines built customized carriers and hubs to connect the world." A significant portion of passengers traveling from London to Singapore, Paris to Sydney, or Frankfurt to Seoul had transited through Dubai or Doha. This model shattered.

Dubai and Abu Dhabi airports had actually been struck during Iran's retaliatory attack. Euronews reported: "Both Dubai and Abu Dhabi airports were hit by Iranian attacks." Every time drone warnings sounded over Hamad International in Doha, aircraft diverted to neighboring countries. Emirates, attempting limited flight resumption with airspace closed, halted regular operations until March 7; Etihad suspended flights on a similar timeline. Qatar Airways, with Qatar's airspace remaining closed, could not determine when regular service would resume.

British Airways canceled flights to Amman, Bahrain, Dubai, and Tel Aviv through May 31 and to Doha through April 30. Abu Dhabi flights were suspended through year-end. Austrian Airlines, part of the Lufthansa Group, operated a crew evacuation flight from Muscat, Oman, to Vienna. Turkish Airlines canceled flights to Iraq, Syria, Lebanon, Jordan, Doha, Dubai, Abu Dhabi, Kuwait, Bahrain, and Dammam through March 19, and to Iran through March 20. Pegasus Airlines canceled flights to Iran, Iraq, Amman, Beirut, Kuwait, Bahrain, Doha, Dammam, Dubai, Abu Dhabi, and Sharjah through April 12.

Tens of thousands of passengers were stranded at Middle Eastern airports. CNN described it as the "largest repatriation operation since the COVID-19 pandemic" or the "largest since World War II." Britain flew a government charter from Muscat, Oman, to London Stansted. The U.S. Embassy ran buses for American citizens in Israel from Jerusalem and Tel Aviv to Egypt's Taba border. Canada prepared charters once UAE airspace reopened. New Zealand deployed two Ministry of Defence transport aircraft to the Middle East. Muscat airport became congested as evacuation and repositioning aircraft poured in, prompting some restrictions on business aviation flights.

Sarah Goodwin, a crew member of Virgin Australia, stranded in Doha, posted a video on TikTok: "I never imagined in my life I would hear the sound of missiles directly."

When the sky closed, the only way left was to go around. And going around was the start of a vicious cycle.

After Russia's 2022 invasion of Ukraine, Russian and Ukrainian airspace had already been closed to most international airlines. Parts of the eastern Mediterranean were also restricted due to the Israel-Gaza conflict. Now, with Iranian, Iraqi, Kuwaiti, Syrian, Qatari, Bahraini, UAE, and Israeli airspace additionally closed or severely restricted, the safe corridors across the Eurasian continent became extremely narrow.

Aircraft flying between Europe and Asia had two remaining options. Northern route: going around through the Caucasus and over Afghanistan into Central Asia. Southern route: going around through Egypt, Saudi Arabia, and Oman, then down along Africa's east coast. Both routes added 2 to 4 hours compared to direct flights.

This added flying time meant exponential growth in jet fuel consumption. Average fares on the Hong Kong-London route jumped 560 percent in a month, reaching $3,318. Bangkok-Frankfurt rose 505 percent to $2,870. The so-called "Kangaroo Route" from Sydney to London climbed 429 percent. According to Alton Aviation Consulting.

Brian Terry, director at Alton Aviation Consulting, stated: "Even if the Iran war ends early, it will take up to three months for lower prices to be reflected in jet fuel supply chains. The combination of increased flight time from alternate routes, reduced seat capacity, and sustained high prices will create ongoing upward pressure on fares for a considerable period." His forecast was that Asia-Europe fares would remain 30 percent or higher above year-ago levels through October.

The insurance market delivered the final blow.

Just as marine insurance completed the naval blockade, aviation insurance completed the blockade of the skies. The memory of Malaysia Airlines Flight MH17, shot down over eastern Ukraine in 2014, remained deeply embedded in the insurance industry. Immediately after the war broke out, global aviation insurers, including Lloyd's of London, refused to underwrite War Risk Insurance for all commercial flights passing through Middle Eastern airspace or raised premiums tenfold to a hundredfold. Indian airlines reported that War Risk Insurance premiums reached as high as 120,000 dollars for a round-trip flight by a single wide-body aircraft such as the Boeing 777 or Airbus A380.

Without insurance, aircraft cannot move a single meter from the runway. Insurance did not block the skies through physical danger but through financial judgment. Missiles and drones blocked the sea, but the insurers' calculators blocked the sky.

18.3 The Meaning of 45 Days of Reserves

March 24, 2026, a Philippine Senate hearing. Energy Secretary Sharon Garin took the witness stand. Senator Lauren Legarda asked the question: "What is the worst-case scenario?" Garin's answer was this: "The worst-case scenario is that the nation runs dry."

This single sentence shook Philippine society.

The numbers Garin presented were as follows: gasoline 53.14 days, diesel 45.82 days, kerosene 97.93 days, jet fuel 38.62 days, heavy fuel oil 61.49 days, liquefied petroleum gas 23.51 days. The average was about 45 days. Kerosene was the most abundant at about 98 days, while liquefied petroleum gas at about 24 days and jet fuel at about 39 days were the most urgent.

We must understand precisely what the 45-day figure meant. This was not 45 days of survival under wartime rationing, but 45 days calculated on the basis of peacetime consumption levels. It meant that with imports completely cut off, if consumption continued at normal rates, supplies would run out in 45 days. If rationing were imposed and demand suppressed, the period could be extended, but even then, two or three months represented the limit.

Moreover, these reserves were not government-owned strategic petroleum reserves. They were entirely commercial inventory held by private refineries and distribution companies. The mandatory stockpile required of private enterprises under the Petroleum Industry Deregulation Act was merely 15 days worth. The remaining 30 days consisted of commercial inventory that companies voluntarily held, and the government lacked strong legal authority to forcibly requisition it.

Senator Legarda's rebuke followed: "You are saying this is not a crisis?" Just one day earlier, on March 23, Malacañan Palace had officially announced that "there is no energy crisis." Within 24 hours, it had become a national energy emergency.

In a nation facing energy depletion, the question of "to whom should the remaining fuel be given first" was not an economic problem but a political one. The Marcos administration had to confront this issue.

The first priority was the working-class economy and food supply chains. The Philippines' public transportation rests on jeepneys (modified American military jeeps introduced after World War II converted into minibuses). Manila's working people could not commute without jeepneys. The government provided cash subsidies of 5,000 pesos (about 83 dollars) to jeepney drivers, extended operating hours for urban rail transit such as the MRT and LRT, and discounted fares. Diesel subsidies were given priority for farmers and fishermen. Keeping the diesel generators of the National Power Corporation (Napocor), which supplies electricity to island regions, operational was designated as a critical task.

Second priority was industrial facilities and hospitals. Meralco, the power company supplying electricity to Metro Manila, had already implemented a rate increase of 64 centavos per kilowatt-hour in early March, and an additional 16 percent increase was announced for April. The inflation rate was projected to reach 6.3 to 7.5 percent in March.

Aviation was placed at the bottom of these priorities. With diesel for trucks carrying rice running low, fuel could not be spared for international flights. When the president acknowledged that "halting aircraft operations is a realistic possibility," it was a declaration that he would accept the cessation of aviation.

But the working people's anger could not be appeased by subsidies.

On March 19, PISTON (Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide, the Nationwide Association of Transportation Cooperatives and Operators), the jeepney drivers' federation, launched a one-day strike. Chair Mody Floranda's demands were three-fold: abolition of value-added tax and excise tax on petroleum products, a price ceiling of 55 pesos per liter, and permission for a 5-peso fare increase.

Numbers lay behind the strike. Diesel that cost 57.60 pesos per liter in January rose to 126 to 130 pesos by late March. More than double. Gasoline jumped from 54.90 pesos to 94 to 99 pesos. Arturo Modello, a 52-year-old jeepney driver, told Al Jazeera: "I used to earn 600 pesos a day, but now I can only make a third of that. I cannot even pay for my child's lunch." He explained his reason for striking this way: "So a deaf government will listen."

On March 23, the No to Oil Price Hike Coalition was launched. It was an alliance of nationwide transportation labor organizations including PISTON, Manibela, Laban TNVS, Kariders, and Kagulong. A nationwide transportation strike spanning two days, March 26 to 27, was announced.

On the day of the strike, Manila was paralyzed. Commuters were stranded on Retex and Philcoa in Quezon City and Sucat Road in Parañaque. Ateneo de Manila University excused students from attendance due to transportation difficulties. Philippine Polytechnic University converted all classes to online format from March 26 to April 1. In Cebu, too, most jeepneys ceased operations, and only motorcycle taxis (habal-habal) and modern jeepneys crowded the streets in overloaded conditions.

On Friday, March 27, thousands of protesters marched to Malacañan Palace (the presidential residence). Their demands were price controls on oil, abolition of fuel taxes, and stricter regulation of the refining industry. Someone in the crowd waved the Iranian flag. The No to Oil Price Hike Coalition claimed that the cause of the Philippines' economic suffering lay in "America's invasion of Iran."

The U.S. Embassy issued a travel alert on March 26: "A nationwide transportation strike is scheduled for March 26 to 27. Complete paralysis of public transportation, additional traffic congestion, and protests including near the embassy are anticipated."

On March 25, President Marcos signed legislation that would allow temporary suspension of fuel excise taxes if crude oil prices exceeded certain thresholds. A four-day work week and expanded work-from-home arrangements were also under consideration. However, the labor organizations leading the strike judged that these measures were insufficient. There was a fact that even Energy Secretary Garin acknowledged. Diesel in Singapore costs about 2.7 dollars per liter, while in the Philippines it costs 2.3 dollars. The prices appear similar, but gas station prices in Malaysia, Vietnam, and Thailand were half that level. The difference stems from government subsidies. Unlike its neighbors, the Philippines has no government subsidies for petroleum products. This is because the Deregulation Act places all pricing decisions entirely in the hands of private companies. Emmanuel Layo, a professor of economics at Cebu University and chief economist for the Philippine Credit Rating and Investment Service (CRISP), told Al Jazeera: "The culprit is the 1998 Petroleum Industry Deregulation Act. Even minor price adjustments create serious problems. Half the population lives in poverty."

The 45-day countdown was not a problem unique to the Philippines. Other Asian nations were making similar calculations. The difference lay in the size of reserves and the government's capacity to respond.

Japan held about 230 days worth of oil reserves, placing it among Asia's more adequately stocked nations. This figure combines national and private reserves. South Korea held approximately 90 days worth of strategic and private reserves. China's estimates vary, but it holds over 120 days worth of reserves and could partially substitute with Russian crude oil imports.

By contrast, the Philippines' 45 days, Vietnam's guarantee of March's aviation fuel, and Pakistan and Bangladesh's fragile reserve structures showed where the energy crisis would arrive first and linger longest. The Wikipedia entry for "Economic Impact of the 2026 Iran War" summarizes it this way: "Among energy-importing nations dependent on the Strait of Hormuz, the vulnerable ones are in Asia."

On March 23, the Philippines began importing Russian crude oil for the first time in five years. The tanker Sara Sky, departing from Russia's Kozmino port, carried 100,000 tons of ESPO Blend (Russian Far East crude), roughly 750,000 barrels, headed for the Petron refinery on the Batangas Peninsula. Here was a situation in which America's ally was importing Russian oil to ease the economic pain of a war America had started. No one explained this irony.

Vietnam also signed a petroleum and gas production cooperation agreement with Russia that same week. It requested fuel assistance from Qatar, Kuwait, Algeria, and Japan. The Philippines' Department of Energy engaged in emergency G2G (government-to-government) talks with the governments of South Korea, Japan, and China.

The fact that aviation fuel ran out first revealed the anatomy of the energy crisis. When energy becomes depleted, what dies first is what sits highest, what is most refined, and what is hardest to replace. Aviation fuel meets all three criteria. A high-grade fuel that operates at 50 degrees below zero, the only form of transportation with no alternative energy source, a supply chain that requires months to recover once disrupted.

And when aviation stops, the reality of globalization is exposed. Globalization is a structure built on the premise that people and goods can move anywhere on earth within 24 hours. Semiconductor components arriving from Thailand to Japan in a day, emergency medicines shipped from Incheon to Manila the same day, business people crossing from Seoul through Dubai to London in a single day,this was the everyday reality of globalization. In March 2026, that everyday reality came to a stop.

Empty airport gates, aircraft lined up along the runway, red letters on the departure boards. This was not merely a question of travel inconvenience. When a 21-mile waterway was blocked, the skyways were blocked too. When the flow of energy was cut, the world's connections were severed. The aviation crisis of March 2026 revealed this truth sooner and more plainly than anything else.

The Philippine Energy Secretary's remark in the Senate hearing that "the nation runs dry" was not a metaphor. After 45 days, it truly does run dry. And those 45 days were the time to decide who would live first.

Attorney Kim Kyung-jin, AI Expert

Specializing in AI Law and Policy · Former National Assemblyperson · Author of Multiple Works

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