Royal Caribbean and Carnival Cruise Line Warn About Fuel Price Surge
May 18, 2026 Team Contributor
Rising fuel prices are putting fresh pressure on the cruise industry, as Royal Caribbean Group and Carnival Corporation signal the financial impact could stretch into 2026. Executives say escalating Middle East tensions and higher oil costs are creating growing risks for cruise operators worldwide.
Cruising continues to attract travellers because of its strong value compared to traditional vacations. A family trip to Walt Disney World can easily exceed $2,500 before hotel and meal expenses are included. In comparison, a six-night voyage aboard Allure of the Seas costs around $3,452 for a family of four, with lodging and dining already covered.
Despite that affordability advantage, cruise companies are now dealing with rapidly rising fuel expenses. Reuters reported that oil prices have surged more than 35% since the conflict escalated in Iran, fueling concerns over disruptions to global energy supplies moving through the Strait of Hormuz.
Jason Liberty, CEO of Royal Caribbean, said, “The most notable financial impact from the Middle East conflict has been on fuel costs. While we are approximately 60% hedged for 2026, fuel prices at current spot levels are expected to increase costs by roughly $0.62 per share this year. Our earnings guidance includes a $0.62 headwind from fuel rates for the remaining of the year.”
Carnival appears more vulnerable because it holds a smaller fuel hedge position. According to company filings, a 10% increase in fuel prices could reduce Carnival’s annual net income by nearly $145 million, while the same increase would affect Royal Caribbean by about $57 million.
David Bernstein, CFO of Carnival Corporation, said, “A 10% change in our fuel cost per metric ton, excluding emission allowances, for the remainder of the year impacts our bottom line by $160 million or $0.11 per share.”
The latest warning has also renewed concerns about potential fuel surcharges for passengers. Cruise operators previously added extra fuel fees during the 2007-2008 oil spike, and while neither company has announced new charges, both acknowledged that prolonged oil volatility could continue pressuring the industry.
About the Author
