Iran Attack Sends Oil Prices Soaring to $100, Cruise Ship Stocks Plunge Across the Board

Investing.com - Carnival Cruise Line (NYSE:CCL), Royal Caribbean Cruises (NYSE:RCL), Norwegian Cruise Line (NYSE:NCLH), and Viking Holdings Ltd (NYSE:VIK) all saw declines in pre-market trading on Thursday after Iran launched a new round of attacks on ships near the Strait of Hormuz, causing crude oil prices to surge to nearly $100 per barrel and raising concerns about rising fuel costs. For the cruise industry, energy costs typically account for 10%-15% of revenue.

Carnival experienced the largest drop among major cruise operators, falling 3.2% to $25.15, while Royal Caribbean declined 2.6%, Norwegian Cruise Line down 2.6%, and Viking down 2.9%. This variation highlights Carnival’s particular vulnerability: according to TIKR analysis, the company does not hedge its fuel demand, meaning each spike in oil prices directly impacts earnings with no buffer. In contrast, Royal Caribbean and Norwegian Cruise Line maintain fuel hedging programs that offer some protection against short-term price shocks.

As of Thursday’s close, Brent crude futures rose $7.31, or 8%, to $99.29 per barrel, while WTI crude increased $6.80, or 8%, to $93.93. This price surge followed attacks on two oil tankers in Iraqi waters between March 11-12, with the total number of ships attacked in the region reaching at least 16 since the U.S.-Israel military actions against Iran began on February 28.

The global travel sector plummeted on Thursday, with analysts emphasizing rising fuel costs, flight cancellations, and rerouting expenses as key pressures. Major Gulf hubs—including Dubai International Airport, the world’s busiest international airport handling over 1,000 flights daily—have been closed for the third consecutive day as of Thursday, intensifying concerns over disruptions in demand across the travel industry.

Hormuz Strait Blockade Threats: 21 Million Barrels of Oil Transported Daily

The Iranian Revolutionary Guard warned that any ships passing through the Strait of Hormuz would become targets. The strait is a critical chokepoint for about one-fifth of global oil supplies, with approximately 21 million barrels transported daily. According to S&P Global, only five oil tankers passed through the strait on March 1, whereas recently about 60 tankers transit daily.

“If the reduction in tanker traffic continues for about a week, it will be historic,” said Jim Burkhard, head of crude oil research at S&P Global.

“Prepare for $200 oil per barrel, because oil prices depend on regional security, and you have already undermined that security,” said Ebrahim Zolfaqari, spokesperson for Iran’s Khatam al-Anbiya military headquarters. “We will not allow even a single drop of oil to flow to the U.S., Zionist Israel, or their partners. Any ship or tanker heading toward them will become a legitimate target.”

The International Energy Agency (IEA) agreed to release a record 400 million barrels of oil from strategic reserves, with the U.S. contributing 172 million barrels. However, Moomoo ANZ market strategist Tina Teng warned that “the IEA’s release of oil reserves may only be a temporary fix, as disruptions in Hormuz Strait oil transport and large-scale production halts in some Middle Eastern countries could lead to long-term supply tightness.”

Goldman Sachs raised its Q4 2026 Brent crude price forecast from $66 to $71 per barrel, citing prolonged disruptions in oil flows through the Strait of Hormuz. Since the conflict began, Brent prices have risen over 36%, and WTI has increased about 39%, with both benchmarks briefly surpassing $119 on Monday, March 9.

Profit Margin Impact: Unhedged Exposure Means Direct Earnings Hit

For Carnival, which does not hedge its fuel costs, sustained crude oil prices rising by $20 could reduce annual operating revenue by approximately $400-$600 million, or about $0.30-$0.45 per share, based on fuel costs representing 10-15% of revenue. With annual revenue around $20 billion, each $10 increase in oil prices would add $2-$3 billion to fuel expenses if costs are not passed on to consumers.

Royal Caribbean and Norwegian Cruise Line’s partial hedging strategies—covering typically 30-50% of near-term fuel needs—will mitigate but not eliminate profit margin pressures. Viking’s smaller fleet size and premium positioning may allow greater pricing flexibility to offset higher fuel costs.

Key Points to Watch

• Carnival’s Q4 2025 earnings report is expected around March 19, where management may provide updated guidance on fuel cost impacts and discuss how the Middle East conflict could affect 2026 outlook.

• The trajectory of oil prices and whether Brent remains above $100 will intensify profit margin pressures across all four cruise operators.

• Data on tanker traffic through the Strait of Hormuz, as an indicator of ongoing supply disruptions—if the current daily flow of five tankers continues for another week, S&P Global analysts warn it could mark the largest sustained oil supply disruption in history.

• Booking trends and cancellation rates, as consumers weigh higher travel costs against geopolitical risks and the ongoing closure of Gulf airports affecting Middle Eastern and Mediterranean routes.

• Updates on hedging strategies discussed during Royal Caribbean and Norwegian Cruise Line’s earnings calls to assess remaining protection into Q2 and Q3 2026.

• Competitive pricing dynamics to determine whether cruise companies can pass fuel surcharges to consumers without sacrificing passenger load factors.

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