The meteoric rise of crude prices past $120/barrel has hogged the limelight, but some parts of the oil complex have seen even more dramatic movements, causing heartache to consumers both large and small.
Take jet fuel for example. While Dated Brent crude has risen by 85% in the last 12 months to sail past $120, jet prices have soared even higher, nearly doubling to current levels of around $165/barrel in Europe.
Record jet prices and a softening in the global economy are having a double whammy on passenger traffic volumes and airline operations. Some airlines have hiked fuel surcharges to pass on the extra costs to consumers, while others, unable to levy surcharges and insufficiently hedged, are being forced to consider taking even more unpalatable measures.
"It's survival of the fittest," said one source with a European airline, noting that jet fuel makes up about 20% of the costs for a major hub carrier, and as much as 30-40% for a low-cost airline.
Air France has become the latest major carrier in Europe to hike fuel surcharges on all tickets issued from May 16, citing the record jet prices.
And worse still, rising jet fuel prices could force some airlines to close down or reduce their operations, UK-based airline easyJet warned this month.
"The price of jet fuel has risen 35% over the last three months and is now 80% higher than last year...What is certain is that if these fuel increases are maintained many of our weaker competitors will disappear or downsize," said the airline's CEO Andrew Harrison.
The Air Transport Association of America expects some 211.5 million passengers to fly this summer, 2.7 million less than a year ago.
The International Air Transport Association said the slowdown in demand was part of a sharp downward trend which began in December 2007, as the impact of the US credit crunch began to be felt in the airline industry. IATA data suggest that international freight growth has shrunk to 3.2%, well below the 4.3% growth recorded in 2007.
"Astronomical oil prices are hitting hard. And the buffer of an expanding economy has disappeared. The fortunes of the industry have taken a major turn for the worse," said IATA director general and CEO Giovanni Bisignani.
The timing is now critical with the summer holiday season fast approaching, but no relief in sight for airlines struggling to cope with these sky-high prices.
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