Carnival Cuts Profit Forecast as Iran War Pushes Fuel Costs Higher

Carnival has lowered its 2026 profit forecast after the war involving the US, Israel, and Iran pushed fuel prices sharply higher.

The company now expects adjusted earnings of about $2.21 per share, down from its earlier forecast of $2.48. Executives said the main reason was a $500 million hit from higher fuel costs, partly offset by $150 million in operational improvements.

Carnival is under more pressure than some rivals

Carnival is more exposed than some competitors because it does not usually hedge fuel.

Oil has risen quickly. A 10 percent change in fuel cost per metric ton would reduce Carnival’s net income by $145 million, compared with $57 million for Royal Caribbean. The same oil shock can hurt one travel company more than another.

The impact is spreading across the travel industry

Carnival is not the only company facing this pressure. Airlines are also warning that higher fuel prices are becoming a serious cost problem. United Airlines has said current oil prices could add about $11 billion to its fuel bill, while Delta said rising fuel prices cost it $400 million in the first quarter.

The fuel shock is now reaching more of travel

The Iran war is not only disrupting routes and raising safety concerns, but also driving up fuel costs across the industry, increasing pressure on fares and margins.

The connection comes through oil, since conflict around the Strait of Hormuz can rapidly raise global prices due to the volume of oil that moves through the area.

Photo by Marco Tjokro on Unsplash