U.S. airline shares fell sharply after President Donald Trump declared an end to the ceasefire with Iran and threatened further strikes, sending crude oil prices higher and reviving fears over jet fuel costs. American Airlines dropped 5%, United Airlines fell 4%, and Delta Air Lines and JetBlue slipped 3% in active trading. West Texas Intermediate crude rose 7.47% to $75.70 a barrel within 24 hours.
The selloff reflects anxiety over fuel expenses, already a severe burden for carriers. U.S. airlines spent $6.66 billion on jet fuel in May, up 84% year-over-year, as average prices hit $4.09 a gallon, nearly double the prior year. The U.S.-Iran war has disrupted the Strait of Hormuz, where three oil tankers were struck on July 8, while Washington has revoked licenses permitting Iranian oil sales.
Bearish bets are mounting: put options on the JETS airline ETF accounted for roughly 75% of its options volume. Airlines had based 2026 guidance on fuel costs of $4 to $4.30 a gallon. Delta reports earnings Friday.