Key Takeaways

  • A two-week ceasefire between the U.S. and Iran was announced by President Trump late Tuesday evening
  • Brent crude oil experienced a decline of up to 16%, trading near $94.30 per barrel
  • Major carriers including American Airlines, United, Delta, Southwest, and JetBlue rose between 4% and 9% in premarket sessions
  • The Strait of Hormuz, a critical passage for 20% of the world’s fuel supply, will reopen under the agreement
  • Carriers faced an estimated additional $11 billion in jet fuel expenses this year before the price drop

Major airline stocks experienced significant gains during Wednesday’s premarket trading session following the announcement of a two-week ceasefire agreement between the United States and Iran, which alleviated concerns about global oil supply constraints.

President Donald Trump revealed the agreement at 6:32 p.m. ET on Tuesday. According to the announcement, the U.S. would halt attacks on Iranian infrastructure for a 14-day period, contingent upon Iran’s commitment to fully and immediately reopen the Strait of Hormuz.

In a post on Truth Social, Trump indicated he had received a comprehensive 10-point proposal from Iranian officials, describing it as a “workable basis” for future discussions. He noted that agreement had been reached on the majority of disputed issues.

Iran’s Foreign Affairs Minister Seyed Abbas Araghchi posted on X that Iran would halt “defensive operations” in the strait once attacks against Iranian territory ceased.

The Strait of Hormuz represents one of the planet’s most critical oil transit routes. Approximately 20% of global fuel supplies flow through this narrow passage, meaning any closure directly affects airline operational expenses.

Brent crude oil prices dropped by as much as 16% after the ceasefire announcement, stabilizing around $94.30 per barrel. This substantial decrease offered immediate financial relief to airlines, which had been grappling with elevated fuel expenses since mid-February.

Carriers Were Confronting Steep Fuel Expense Increases

U.S. carriers were facing projections of an additional $11 billion in jet fuel expenditures for 2025 because of the oil price surge. United Airlines CEO Scott Kirby had cautioned that escalating fuel costs could have a “meaningful” effect on first-quarter financial performance.


UAL Stock Card
United Airlines Holdings, Inc., UAL

Delta Air Lines had recently increased its checked baggage fees for the first time in two years as a measure to counterbalance fuel cost pressures. United Airlines implemented a comparable fee adjustment during the same period.

Stock Performance Across the Sector

American Airlines advanced 6.2% during premarket trading. United Airlines shares climbed 8.7%, while Southwest Airlines gained 8.1%, Delta Air Lines increased 6.8%, and JetBlue Airways rose 5.9%.

The U.S. Global Jets ETF posted a gain of 7.7%, indicating widespread enthusiasm throughout the aviation sector.

European airline carriers experienced similar momentum. Lufthansa, Wizz Air, Air France-KLM, and easyJet each recorded gains exceeding 10% during morning trading sessions.

The airline sector had faced downward pressure since mid-February as escalating tensions in the Middle East drove oil prices upward and generated concerns about industry-wide profit margins.

Delta Air Lines was set to release its first-quarter earnings results later on Wednesday, drawing additional attention from investors monitoring the aviation sector.