Surge in Oil Prices Hits Airline and Cruise Stocks Hard in 2025
Rising oil prices have reached a five-month peak, significantly impacting airline and cruise company stocks due to increased fuel costs amid global supply concerns.
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Oil prices surged to their highest point in five months on Monday, exerting downward pressure on the stock prices of airlines, cruise lines, and other fuel-dependent businesses. This spike is largely attributed to recent Treasury Department sanctions targeting the Russian oil sector, sparking fears of global supply interruptions.
Brent crude, the international oil benchmark, climbed over 1% to nearly $81 per barrel, marking its peak since August. Meanwhile, West Texas Intermediate, the U.S. benchmark, rose almost 3% to $78.70 per barrel by Monday afternoon.
Airlines, which incur substantial fuel expenses, felt the impact immediately. Shares of Delta Air Lines (DAL) and United Airlines (UAL) each dropped more than 2%, while American Airlines (AAL) experienced a decline exceeding 4%. Cruise companies such as Carnival (CCL) and Norwegian Cruise Line (NCLH) also saw their shares dip by approximately 1.6% and 0.6%, respectively.
Conversely, oil and gas producers benefited from the price increase, ranking among the top gainers on the S&P 500 that day. Baker Hughes (BKR) shares rose nearly 4%, and ExxonMobil (XOM) advanced close to 3%.
Despite recent volatility, travel stocks had a strong performance in 2024, buoyed by lower oil prices earlier in the year and sustained consumer travel demand post-pandemic. United Airlines emerged as one of the best-performing stocks on the S&P 500, with its share value more than doubling over the past year. Delta's stock rose approximately 69% during the same period, while Royal Caribbean (RCL) shares increased by over 87% in the last 12 months, despite minor fluctuations on Monday.
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