Key Highlights

● Alaska Air fell on Tuesday, after saying jet fuel is running about $4.40 a gallon versus an optimal $3.25.

● The airline is betting on premium seating to lift earnings per share by $3 to $4 on fuel.

● West Texas Intermediate settled down $3.22 at $89.38 a barrel as Middle East exports recovered and Saudi loadings resumed.

● Cruise lines cheered the oil slide, while Ryder System fell after a Baird downgrade and price target cut.

Crude oil had a rough day on Tuesday, September 29, 2026. West Texas Intermediate settled down $3.22 at $89.38 a barrel on signs that Middle East exports were recovering. For airlines, though, the relief only goes so far. Alaska Air Group (NYSE:ALK) fell after updating investors on fuel and its fleet, saying jet fuel is running at about $4.40 a gallon, compared with what it views as an optimal level of about $3.25.

Alaska's Premium Plan Hinges on Fuel

Alaska is betting on premium seating to lift its earnings per share by $3 to $4. But the timing depends on fuel. Chief financial officer Shane Tackett said whether that happens in 2027 or a bit later, it will be highly dependent on fuel prices and the broader economy. On international expansion, he added that it is a must-do for the airline.

Why Jet Fuel Lags Crude

Jet fuel is a refined product, so its price depends not only on crude oil but also on refining capacity and demand for middle distillates such as diesel. When crude falls, jet fuel does not necessarily follow at the same speed or to the same degree. Airlines also often lock in fuel prices in advance, so a single day's slide in crude takes time to reach their costs. And crude is still far higher than it was before the conflict with Iran, ahead of the late-February U.S. and Israeli strikes on Iran.

The Supply Picture Is Improving

Tuesday's decline came as supply fears eased. Saudi Arabia resumed tanker loadings at Yanbu after restarting its East-West pipeline, and Middle East crude exports in September rebounded to around 16 million barrels a day, the highest since the war began. The Department of Energy also offered up to 40 million barrels from the Strategic Petroleum Reserve. Diplomacy is a wild card, as U.S. and Iranian officials held separate indirect talks with mediators and Qatar said mediation continues. One analyst said geopolitical developments remain very headline driven and revolve around the prospect of a peace deal.

Travel Stocks Split

Fuel-sensitive cruise lines cheered the oil slide. Carnival (NYSE:CCL) soared to $25.11 after a strong quarter, even though it absorbed a $150 million hit from energy costs. In transport, Ryder System (NYSE:R) fell after Baird downgraded it to Neutral and cut its price target to $245 from $290. A Tuesday close for the Dow Transportation Average was not reported.

The Broader Market

Energy was the worst S&P 500 sector as oil fell, while utilities led. The S&P 500 slipped 12.85 points, or 0.17%, to 7,670.84, while the Dow Jones Industrial Average fell 131.59 points to 51,349.92 and the Nasdaq Composite finished nearly flat at 26,797.54. The 30-year Treasury yield reached its highest level since 2002, and the 10-year touched its highest in roughly two decades.

Oil and Talks to Track

Airline investors will track oil prices, any progress in U.S. and Iranian talks and Middle East export flows. On Wednesday, September 30, brings August PCE inflation and the third GDP estimate. The September jobs report follows Friday, October 2, and the Fed meets October 27 to 28.