Airline stocks got sucker punched Tuesday after a series of ship attacks in the Strait of Hormuz caused oil prices to rise and the U.S. revoked waivers allowing companies to buy and sell Iranian oil.

While shares of all major U.S. airlines saw declines, JetBlue got hit the hardest, falling nearly 6% by late afternoon. That is likely because JetBlue is less well positioned to absorb higher jet fuel prices, which could result from continuing hostilities between the U.S. and Iran.

JetBlue has the weakest financials among top U.S. carriers, with analysts polled by FactSet expecting it to increase its losses per share in 2026 to $2.32 up from $1.64 in 2025. While jet fuel prices have fallen sharply from their spring highs north of $200 a barrel, JetBlue said last month that it only expects to recoup around 40% of its jet fuel costs in the second quarter.

Other major airlines rely more on higher-priced offerings and loyalty program revenue, which could buffer any effects from rising fuel prices. American was down nearly 4%, while Delta, which reports earnings later this week, fell more than 3%. Investors may be selling ahead of the carrier's results in case the outlook doesn't look so bright amid ongoing tensions in the Middle East.

In the most recent attack Tuesday afternoon local time about seven miles east of the Musandam Peninsula in Oman, a drone struck an oil tanker, causing "minor structural damage," according to the United Kingdom Maritime Trade Operations Centre.

The incidents caused the maritime group to raise its threat level to severe, while pushing the price of both Brent crude and West Texas Intermediate futures settled up about 3% to $74.16 and $70.44 a barrel, respectively. Before Tuesday, the benchmarks had fallen 22% and 24% over the past month, respectively.

As for airline stocks, Tuesday's drop comes after a strong start to 2026, which saw them rise nearly 20% as measured by the U.S. Global Jets ETF. With summer travel seen in full swing, investors will be closely watching how well they handle the ongoing turbulence.

Write to Anita Hamilton at anita.hamilton@barrons.com

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(END) Dow Jones Newswires

July 07, 2026 16:04 ET (20:04 GMT)

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