TLDR
- President Trump announced a two-week ceasefire agreement between the U.S. and Iran late Tuesday evening
- Brent crude prices plummeted up to 16%, trading near $94.30 per barrel
- Delta, United, American, Southwest, and JetBlue surged between 4% and 9% during premarket hours
- Critical Strait of Hormuz waterway—carrying 20% of the world’s fuel supply—will reopen under the agreement
- Airlines faced an anticipated $11 billion in additional jet fuel expenses this year before the ceasefire
Major airline stocks experienced significant gains in Wednesday’s premarket session following the announcement of a temporary ceasefire between the United States and Iran, which alleviated concerns about global oil supply constraints.
The agreement was revealed by President Donald Trump at 6:32 p.m. ET Tuesday evening. Under the terms, the United States will halt strikes on Iranian infrastructure for a fortnight, contingent upon Iran’s commitment to immediately and completely reopen the Strait of Hormuz.
In a Truth Social post, Trump disclosed that he had received a 10-point framework from Iranian officials, characterizing it as a viable foundation for further negotiations. He indicated that the parties had reached consensus on nearly all disputed issues.
Iran’s Foreign Affairs Minister Seyed Abbas Araghchi verified on X that the country would halt “defensive operations” in the strait contingent on the cessation of military actions targeting Iran.
The Strait of Hormuz represents one of the planet’s most critical petroleum transit routes. Approximately 20% of worldwide fuel supplies traverse this waterway, meaning any closure directly impacts airline operational expenses.
Brent crude experienced a sharp decline of up to 16% in the wake of the ceasefire news, stabilizing around $94.30 per barrel. This substantial price reduction offered immediate financial respite to airlines, which had been grappling with inflated fuel expenditures since mid-February.
Airlines Had Been Grappling with Skyrocketing Fuel Expenses
U.S. carriers were facing an estimated $11 billion in additional jet fuel expenditures for 2025 stemming from the recent oil price surge. United Airlines CEO Scott Kirby had previously cautioned that escalating fuel prices could significantly affect the company’s first-quarter financial performance.
United Airlines Holdings, Inc., UAL
Delta Air Lines had recently implemented its first checked baggage fee increase in two years as a countermeasure against rising fuel costs. United Airlines instituted comparable fee adjustments during the same period.
How Airline Stocks Performed
American Airlines advanced 6.2% in premarket activity. United Airlines surged 8.7%, while Southwest Airlines jumped 8.1%, Delta Air Lines increased 6.8%, and JetBlue Airways climbed 5.9%.
The U.S. Global Jets ETF posted a 7.7% gain, demonstrating the widespread enthusiasm across the aviation sector.
European airline operators experienced similar momentum. Lufthansa, Wizz Air, Air France-KLM, and easyJet each recorded gains exceeding 10% during morning European trading sessions.
Aviation stocks had been experiencing downward pressure since mid-February as escalating Middle Eastern geopolitical tensions drove oil prices upward and sparked concerns regarding industry-wide profitability.
Delta Air Lines was slated to release its first-quarter earnings report later Wednesday, providing additional interest for investors monitoring the sector’s performance.
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