Oil plunging on Iran peace hopes, airlines surging — ride the travel rally on Delta and United
Oil prices fell 3% today on growing hopes that the US and Iran are nearing a peace deal that would reopen one of the world's most important oil shipping routes. Airlines and travel stocks are rallying hard because cheaper jet fuel means bigger profits and calmer geopolitics means more travelers.
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The Strait of Hormuz handles roughly a fifth of all global oil shipments. If a US-Iran agreement restores normal traffic there, oil could keep falling — and airlines count fuel as their single largest expense. Delta and United were already among the S&P 500's top performers today, and casino-resort operator MGM is riding the same wave of consumer-travel optimism. If a formal deal actually materializes, today's jump may be the early innings of a much bigger move. Even the possibility of gas prices staying below the feared $5-per-gallon summer spike should keep travelers booking flights and hotel rooms.