Global air cargo operations face severe as escalating Middle East conflict forces route suspensions, triggers dramatic fuel price spikes and pushes capacity down by double digits. Oman Air Cargo becomes the latest carrier to implement emergency surcharges, while major gulf hubs handling Asia-Europe freight remain closed to commercial traffic.
Oman Air Cargo Implements Emergency Surcharges
Effective March 18, 2026, Oman Air Cargo will introduce both fuel and war risk surcharges across its entire network. The measures respond directly to volatile operating conditions that have sent jet fuel prices soaring and insurance costs climbing.
The fuel surcharge will be calculated using US Gulf Coast Jet A1 price per gallon based on data published by the U.S. Energy Information Administration. Reviews will happen weekly to track global fuel price movements in real time.
The war risk surcharge will be applied on a per kilogram basis using chargeable weight stated on the Master Air Waybill. Both surcharges apply to shipments originating from, destined for or transiting through the Oman Air Cargo network.
Oman Air Cargo, established in 2009 and operating B-737-MAX and B-787-9 aircraft, connects more than 200 destinations worldwide from its Muscat hub. The company will keep surcharges under regular review and adjust them as market conditions shift.
Fuel Prices Double Across the Industry
Jet fuel prices have approximately doubled amid the latest Middle East developments. Cathay Pacific announced fuel surcharges would roughly double from March 18, with short-haul rising to $37 from $18, medium-haul climbing to $69 from $34, and long-haul jumping to $149 from $73.
Multiple factors are driving the surge. Brent oil rose to $88 per barrel on Thursday, up from $61 at the end of last year. Global aviation fuel increased 3.6% last week to $99.40 per barrel. U.S. jet fuel climbed from $2.50 to $2.83 per gallon.
These increases hit carriers hard. Rising costs extend beyond fuel to include war-risk insurance premiums and longer routing expenses due to closed airspace. Aircraft must carry extra fuel for diversions, reducing payload capacity and driving up costs per kilogram shipped.
Gulf Hub Closures Slash Global Capacity
Global air cargo capacity has fallen 18% week-over-week, with 13% directly tied to large Middle East carriers like Emirates, Qatar Airways and Etihad Airways. Freighter and passenger-belly capacity has dropped nearly 40% on the critical Asia-Middle East-South Asia-Europe corridor.
Major service suspensions include:
- Cargolux: Temporarily suspended all freight bound for the Middle East except Muscat
- Air France-KLM Martinair Cargo: Halted services to Dubai, Riyadh, Beirut, Tel Aviv, Dammam, Dubai World Central and Cairo
- Cathay Pacific: Suspended passenger and cargo services to Dubai and Riyadh until at least March 31
- FedEx: Suspended all flights in and around the Arabian Gulf
- Qatar Airways: Operations remain suspended following Qatari airspace closure
Twenty-one aircraft were evacuated from Bahrain International Airport, including 11 Gulf Air jets and nine freighters, seven thought to be DHL’s. Airports in Dubai, Abu Dhabi and Qatar remain closed to commercial traffic, though some emergency flights are now allowed.
Critical Transit Points Disrupted
Gulf hubs play a central role as major transit points linking Asian manufacturing centres with markets in Europe and North America. The closures create immediate bottlenecks for shippers moving time-sensitive cargo.
“About 80% of the India-Europe cargo goes through the Middle East, which means that a lot of vaccines and pharmaceuticals are not able to make their way through to Europe. If this lasts a few weeks we can anticipate drug shortages.”
– Glyn Hughes, Director General, The International Air Cargo Association
Hughes also warned that cargo stranded on high-volume routes will take several weeks to clear throughout the global network. Perishable or time-sensitive cargo could be unsalvageable.
Freight Rates Surge Across Trade Lanes
Air freight rates are climbing sharply as carriers reroute aircraft, reduce payloads for extra fuel and pass through rising costs. Southeast Asia-Europe shipping rates jumped more than 6% to $3.82 per kilogram since Friday. South Asia rates to Europe rose 3% and 5% to the United States. Middle East-Europe rates jumped 8%, while China-U.S. rates increased 15%.
Global cargo capacity now sits 21% below pre-Chinese New Year levels in mid-February, despite air cargo volumes growing 4% year-over-year in 2025 and demand rising about 6% in the first two months of 2026. Capacity growth of just 4% in early 2026 cannot match demand growth.
Shippers Scramble for Alternative Routes
Freight forwarders are working fast to find alternative routing options, though capacity remains limited. Options include:
- Sea-air services via the Maldives
- Truck-air service through Tashkent
- Routes through Riyadh and Oman where operations continue
- Charter flights on available capacity
Stefan Paul, CEO of Kuehne+Nagel, suggested the crisis may shift some ocean cargo to air freight as shippers try to bypass ocean shipping bottlenecks, which could benefit air freight pricing despite supply constraints.
Economic Impact Beyond Aviation
Rising oil prices driven by the conflict threaten to slow global economic growth and boost inflation. Each $10 per barrel increase in oil prices would reduce U.S. economic growth by about 0.1 percentage points. A sustained 10% increase in oil prices boosts U.S. headline inflation by 28 basis points.
If oil prices hit $100 per barrel, economic impacts will ripple across industries and consumer spending patterns worldwide.
What This Means for Freight Forwarders
SME forwarders face immediate challenges. Surcharges cut into margins. Route disruptions force manual rework of quotes and bookings. Clients demand answers about delayed shipments and rising costs.
Speed matters now more than ever. Quote multi-leg alternatives fast. Compare A2A and D2D options across available carriers. Lock rates before the next weekly fuel adjustment. Track shipments in real time and keep clients informed.
Forwarders with access to open networks covering multiple carriers and routes will navigate this volatility better than those tied to single partnerships or closed platforms. The ability to compare live rates, book direct and quickly between routing options becomes competitive advantage.
This will persist for weeks, possibly months. Plan for continued fuel surcharge increases, limited gulf hub capacity and elevated rates on alternative routing. Build flexibility into your operations. Stay close to clients. Move fast.
