Airlines and cruise lines saw their stock prices drop on Friday afterward.
Israel initiated a series of assaults on Iran’s nuclear and missile installations.
, sending oil prices higher and leading to fears of a spike in fuel prices for planes and cruise ships.
Shares of United Airlines Holdings and Delta Air Lines dropped by 4.1% and 3.7%, respectively. Major cruise line stocks were also declining; Carnival lost 4%, Royal Caribbean Group decreased by 2.1%, and Norwegian Cruise Line Holdings went down by 2.4%.
Despite being one of the globe’s major oil suppliers, Iran’s recent developments have raised worries about escalating conflicts in the Middle East and potential disruptions to worldwide fuel distribution. This led to an increase in Brent crude prices by 7.3%, reaching $74.39 per barrel. Simultaneously, the price for West Texas Intermediate crude—the standard used in the U.S.—rose by 7.8% to hit $73.34 per barrel.
Other issues were simmering below the surface. A protracted conflict might undermine travelers’ trust and have direct implications for airlines and cruise lines, including those not operating in the Middle East.
On Friday, air carriers mostly steered clear of the area due to heightened passenger safety worries, which led to numerous flight cancelations and reroutings. The disturbances started on Thursday evening after the first attacks on Tehran. Flights run by United and Delta heading from New York to Tel Aviv had to return shortly after takeoff. These two airlines have suspended their services to the Israeli city until at least Saturday.
Geopolitical strains are not an unfamiliar burden. For instance, Royal Caribbean decided to exclude Israel from its schedules until October 2024 due to the ongoing conflict between Israel and Hamas. It’s worth noting that this major cruise line operates two vessels based out of the Port of Haifa.
On Friday, shares of travel agencies were also dropping. Expedia Group and Booking Holdings each saw decreases of 2.1% and 1.8%, respectively.
Tensions reached their peak when Israel initiated an assault on Tehran during the early hours of Friday locally. According to the Israeli Defense Forces, this strike aimed to exploit a “strategic window of opportunity” amid Iran’s ongoing “terror campaign,” which involves financing militant operations throughout the area while progressing towards developing nuclear weapons capabilities.
The attacks resulted in the deaths of senior military officers along with multiple nuclear experts. According to Iran’s state-run media outlet, at least a dozen civilians lost their lives as well during this incident.
In response, Iran sent out drones. According to a statement from the Iranian Ministry of Foreign Affairs, Israel’s strikes were characterized as a breach of the UN Charter “as well as an outright aggressive action against the Islamic Republic of Iran.”
On Friday, President Donald Trump posted on Truth Social stating that Iran was responsible for bringing about the attack. “I recently issued an ultimatum to Iran giving them two months—until now—to ‘cut a deal.’ They missed their chance,” Trump commented. Additionally, he encouraged Iran in another message to resolve matters swiftly before it becomes too late.
Send your message to Mackenzie Tatananni.
mackenzie.tatananni@barrons.com
Leave a Reply