Oil crashing on Iran peace hopes, airlines surging — ride the fuel-savings trade on Delta and United
Oil prices are falling fast — down another 3% today — as rumors swirl that the U.S. and Iran may be nearing a deal to end the war and reopen a critical shipping route. Airlines, which spend massively on jet fuel, are already surging on the news.
Idea
Airlines are among the biggest beneficiaries when oil drops because jet fuel is their single largest expense. Oil has now slid over 5% in two sessions on growing hopes that a U.S.–Iran deal will reopen the Strait of Hormuz and free up global energy supply. Delta and United were already among the S&P 500's top performers Wednesday as investors piled into the trade. If peace talks continue to show progress, the fuel-savings story could push these stocks even higher. The risk is that a deal falls apart and oil snaps back — so keeping a tight stop is important.