U.S. airline shares moved lower in premarket trading on Monday after oil prices surged in response to President Donald Trump dismissing Iran’s latest reply to a U.S.-backed peace proposal as “totally unacceptable,” raising fears that disruptions to global crude supplies could…
rsist. Brent crude futures climbed 2.7% to $104.02 per barrel by 05:14 ET (09:14 GMT), while U.S
West Texas Intermediate crude gained 2.3% to $97.55 a barrel. The Strait of Hormuz remained largely shut, continuing to tighten global energy supplies. Against that backdrop, airline stocks came under pressure as investors assessed the impact of higher fuel costs on the sector.
Shares in Southwest Airlines (NYSE:LUV) and United Airlines (NASDAQ:UAL) each fell around 1% in premarket trading, while Delta Air Lines (NYSE:DAL) and American Airlines slipped roughly 0.8%. The rise in crude prices erased a large portion of last week’s declines, when both oil benchmarks had dropped approximately 6% amid optimism that the 10-week conflict might soon ease and that shipping traffic through the Strait of Hormuz could resume. Those expectations weakened after Iran unveiled its counterproposal on Sunday, which reportedly extended far beyond the limited ceasefire framework originally proposed by Washington.