Treasury Secretary Scott Bessent is blaming “judicial overreach” for the carrier’s collapse today, saying the blocked JetBlue merger was a suicide pact…
United and Delta shares are drifting higher as they prepare to feast on Spirit’s carcass, but the broader sector is terrified of the fuel bill…
Budget travelers are finding $400 round-trips for routes that cost $80 last May, the “democracy of the sky” is officially ending…
Logistics experts warn that air freight surcharges are the next domino to fall, expect your “free shipping” to vanish by the summer solstice…
Spirit was the canary in the coal mine, the high-octane war economy just killed it.
We’re going back to a world where flying is a luxury, not a right.
If the Hormuz escort doesn’t lower the barrel price, Spirit won’t be the last airline to go dark.
Analysts warn fuel surcharges will kill budget models if Hormuz stays hot
JPMorgan recently warned that oil prices could spike to $120 to $130 a barrel in the near term, with the potential to surge above $150 if the Strait of Hormuz remains disrupted into mid-May. The bank isn’t alone in this view. Onyx Capital Group’s CEO Greg Newman forewarned earlier this year that, “We’re very much in the $150 range, but I don’t think it’s ridiculous at all to [suggest] $200.” Meanwhile, the chief market strategist of Longview Economics, Chris Watling, said that he “wouldn’t be surprised if oil went to 200 bucks, or even 250, because commodity prices go parabolic when there’s a shortage of supply.”
The Strait of Hormuz closure by Iran and U.S. Navy blockade is having a massive impact on the global oil market. Oil production in the Persian Gulf has fallen 57% due to the closure. The global economy is offsetting this enormous supply shock by pulling a record of 11 million to 12 million barrels per day from storage. It can’t keep draining its stockpiles indefinitely. At some point, oil will need to rise high enough to force users to lower their demand.