Carnival Corp (NYSE:CCL) is up 3% today as oil pulls back slightly, but the stock is still down 22% this month, with Brent crude trading over $90.



Carnival is the only major cruise operator that does not hedge its fuel purchases. 



CFO David Bernstein has said the company manages fuel risk through consumption efficiency rather than derivatives, a strategy that saved them money when oil was at $65. It is working less well now.



Royal Caribbean Cruises (NYSE:RCL) and Norwegian Cruise Line Holdings (NYSE:NCLH) both hedge the majority of their fuel exposure. RCL is down 3% this year, NCLH 14%.



William Blair analyst Sharon Zackfia estimates the oil spike could cut roughly $0.20 from Carnival’s full-year earnings per share. 



Goldman Sachs cut its CCL price target to $30 from $34. Stifel lowered to $35 from $40 while maintaining a Buy.



Carnival had been one of the cruise sector’s comeback stories. The company posted record net income above $3 billion in 2025, reinstated its dividend for the first time since the pandemic, and guided for over $3.45 billion in net income for 2026. Bookings were at all-time highs. Then oil doubled.



<h2>What Prediction Markets Say About Oil</h2>



As the war rages in the Middle East, Polymarket’s traders only give a 29% chance that oil retreats to $80, and a 10% chance it hits $70 this month. 



A separate contract on whether Strait of Hormuz shipping traffic returns to normal by April 30 is trading at 44%. 



Thirteen ships have been attacked since the war began on Feb. 28, and the IRGC said Wednesday it will not allow “a litre of oil” through for the benefit of the U.S. and its allies. Iran’s new supreme leader Mojtaba Khamenei said Thursday the closure should continue as “a tool to pressure the enemy.”



Polymarket’s U.S. recession contract has jumped from 21% in February to 34% now. 



<h2>What Comes Next</h2>



Carnival reports Q1 earnings before the bell on March 20. Wall Street expects $0.18 EPS on roughly $6.1 billion in revenue. That guidance was set before oil doubled from its February lows. 



One thing investors probably should not expect: a sudden change in fuel strategy. Even if management reversed course now, they would be locking in prices at the worst possible moment. 



The more interesting question may come later: if oil eventually retreats, will Carnival lock in cheaper fuel then, or make the same bet twice.



Image: Shutterstock

Carnival Corp (NYSE:CCL) has seen a 22% drop in stock value this month, despite a 3% increase today as oil prices pull back. The company does not hedge fuel purchases, unlike competitors Royal Caribbean and Norwegian Cruise Line, which may lead to a $0.20 cut in earnings per share due to rising oil prices. Analysts have lowered price targets for CCL, and predictions indicate a 34% chance of recession. Carnival is set to report Q1 earnings on March 20, but no changes to its fuel strategy are expected.

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Carnival Drops 22% This Month As Unhedged Fuel Strategy Backfires