The cruise industry’s fuel operating costs typically sit at around 10% of their expenses. During periods of oil price volatility, that expense can dramatically increase and that’s what we’re about to see. Cruise margins are a fragile fragile thing. During COVID, RCL stock plummeted to $30. It’s currently sitting at 300. There is no world where the disruption in oil supply and price doesn’t crush this stock. In 2022, total fuel expenses for cruises doubled, and we’re about to see significantly more disruption in oil than we had in 2022. This fat pig is headed for slaughter.
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Posted by Electrical_Trash_992
14 Comments
Even if there was no oil left in the world itd still be bullish for the market, Godspeed
Missed opportunity to say they are going to get sunk by the conflict.
I like watching carnival hood cruises videos and thankful I’m not on the boat
Maybe a bit late to the party but sound reasoning; also WTI does make less bunker fuel in a destination column then sour heavy crude makes; and most asian routes should be cancelled as Bunker fuel there is insanely up (160+$pb in singapore) and I think Mersk said on the weekend that they where looking into shipping bunker fuel there in order to keep their fleet moving.
Overall yes cruise line margins should collapse
one thing i wonder about is the fuel source. you might want to double check if the type of black tar that ships run on is effected by this blockade
(Does OP think that the TRILLIONS of dollars in the markets are unaware of this….?)
Sound reasoning, but it might recover faster than you think. Thier fuel is less refined and less susceptible to oil bottlenecks.
You could have just used 2022 as the only comparison, oil was negative in 2020 because everything was grounded and their cliff dive downwards had more to do with the fact that there were 0 revenue. Off-topic at least the cruises became filthy cheap by the time they opened up for “cruise to nowhere”, it was a pretty alright experience chilling as the cruise just go around the ocean.
Is this insinuating fuel costs are going to rek their balance sheets? Wouldnt this also apply to airliners?
Earnings on May 6, 2026 – why wouldn’t you buy the contracts for a later date?
I can’t speak for Carnival, but smart companies buy a good chunk of their fuel costs on futures a year out to weather storms such as this. It locks in a lot of their operating expenses. A prolonged conflict is a different beast.
The real question to me is whether or not the conflict will hurt their business in the short or long terms.
Airlines too
CCL graph looked very bullish before the war. Ive lost $$ on my calls.
Totally agree. Shorting airlines here.