Energy & commodities RegionUnited States Impact Major
Southwest, United cut 2026 profit outlook on higher fuel costs
What happened
Southwest Airlines became the third major U.S. airline this month to cut its 2026 profit forecast due to higher fuel prices. United Airlines also cut its profit outlook for the year as fuel prices continued to climb, though travelers keep booking despite higher fares. Separately, oil stocks in the US strategic petroleum reserve have fallen to their lowest level since 1982.
What it means for markets
Rising fuel costs are pressuring airline margins, with multiple carriers cutting profit forecasts. Lower US strategic reserve stocks reduce the government's ability to cap prices, supporting crude. The potential move by major oil companies into Iraq signals long-term supply interest, which could cap price gains.
AssetExpectedMove since first report
Crude oil USO Lower strategic reserve stocks and potential supply constraints support crude prices
▲ Up
+4.99% 160.81 (2026-10-19) → 168.83 (2026-10-30)
Airlines JETS Higher fuel costs and profit forecast cuts pressure airline margins
▼ Down
+5.28% 25.58 (2026-10-19) → 26.93 (2026-10-30)
Energy stocks XLE Oil majors may benefit from higher crude prices and Iraq supply opportunities
▲ Up
+3.27% 67.80 (2026-10-19) → 70.02 (2026-10-30)
What to watch
- Any further airline profit warnings on fuel costs
- OPEC decisions on production levels
- US government response to falling strategic reserve stocks
Companies named
Source timeline
- CNBC Fewer people are flying as airfare soars. Here's why airlines aren't worried
- Reuters US airlines struggle to offset soaring fuel costs with big fare hikes
- CNBC Southwest Airlines cuts 2026 profit forecast on higher fuel
- CNBC United Airlines slashes 2026 profit outlook on fuel prices, but travelers keep booking despite higher fares
- smh.com.au OPEC: Major oil companies considering a move back into Iraq to tap oil reserves
- Reuters Oil majors face spending test from Iran war windfall cash
- Reuters Oil stocks in US strategic petroleum reserve fall to lowest level since 1982