Does Delta’s oil refinery protect it from price spikes? It’s complicated.

United Airlines CEO Scott Kirby said last week he expects a “meaningful” financial impact to his company’s quarter from the price hikes that will “probably” soon start affecting ticket prices, per CNBC.

In a statement a Delta spokesperson said the company “continues to closely monitor” the situation in the Middle East but could not “comment on or speculate about potential impacts to ticket prices.”

Fares “can vary by market and over time and are influenced by a range of factors, including supply and demand, operating costs such as fuel, seasonality and competitive dynamics,” the statement read.

High fuel costs have driven airlines to add fuel surcharges to international fares in the past.

But Delta does have something unique in the market: its Monroe Energy refinery in Pennsylvania, which the airline acquired in 2012, promising it would save hundreds of millions of dollars in annual fuel expenses.

It refines nearly 200,000 barrels of crude oil per day, and while the facility is optimized for jet fuel it also makes gasoline, diesel and home heating oil. In 2025, Delta reported about $5 billion in revenue from its refinery.

These days, it’s a good thing to have, said Tom Kloza, chief energy adviser for Gulf Oil.

Delta is “a tremendous beneficiary of their refinery” right now, he said.

All U.S. refiners, he said, are beneficiaries of the current conflict because of lower crude oil, natural gas and hydrogen prices in this region — especially compared with Asia and Europe, he said.

“Fortunately for (Delta), they’ve seen crude oil prices go up, but they’ve seen finished products — gasoline, jet fuel, heating oil and diesel — go up by even more,” he said.

That also means Delta isn’t paying as much of the higher refinery costs as its competitors.

Jet fuel is not something that is commonly left in surplus storage around the world, he said, which leaves it vulnerable to quick spikes, Kloza said.

“It is a product that can have explosive rallies more than some of the high marquee products like gasoline and diesel,” he said.

Delta’s refinery has functioned as an “operational hedge, as it relates to refining margins and that … certainty of supply into the Northeast,” Chief Financial Officer Dan Janki told investors in 2024. It has served Delta well over the last decade, he said.

“It meets all our needs into the Northeast and then it provides that operational hedge on that. And that’s unique because you can’t do that actually in the financial markets.”

U.S. airlines, including Delta, have largely abandoned the practice of hedging on fuel, a past strategy to protect from volatile prices.

“I’ve lost way too much money hedging fuel. So I swore off that drug a long time ago,” CEO Ed Bastian told investors in 2024. He was company president when Delta purchased the Monroe refinery.

Ticket price relief?

But will the existence of the refinery mean Delta’s ticket prices might stay more insulated than its competitors?

It’s not so easy to predict, Kloza said.

“String theory is very easy by comparison,” he said of predicting airfare pricing.

Delta and all airlines are also vulnerable right now to dampened travel demand given the conflict, as well as the ongoing Transportation Security Administration funding lapse affecting staffing.

“In general, the airline industry is stressed,” he said.

And refineries can be a drag on a bottom line at other times, he noted.

“I’m sure that the people who effectuated the refinery purchase back in 2011, I’m sure they’re taking a victory lap,” Kloza said. “But, you know, times can get tough very, very quickly, and refining can be a tough business.”

The company has hardly noted the refinery in its earnings reports over the last two years, he pointed out. And several years ago Delta tried to sell off an ownership stake in the refinery.

“Maybe now they’ll highlight it a little bit more,’” he predicted.

Delta and other airlines are expected to present to investors next week at a J.P. Morgan conference.