Aviation stocks: IndiGo, SpiceJet soar 8% as crude oil prices decline sharply; all you need to know

Oil prices dropped as the US President Donald Trump recently remarked on a potential de-escalation of the raging US-Iran conflict, which he said is to end “very soon.”

This comes a day after oil prices surged past the $100 a barrel mark, which had raised concerns about an increase in aviation turbine fuel (ATF), which comprises a significant part of airlines’ operating costs.

Shares of InterGlobe Aviation, the parent company of IndiGo, soared as much as 5.59% to an intraday high of ₹4,473.70 per unit on the National Stock Exchange (NSE). At around 11:09 AM, the stock was trading 3.8% higher at ₹4,379.60 per equity share.

The stock of budget carrier SpiceJet gained as much as 7.73% to the session’s peak of ₹14.08 apiece on the BSE. At the time of writing, it stood at ₹13.81 per equity share, marking a 5.66% rise.

Shares of airport service aggregator Dreamfolks Services advanced as much as 2.63% to the day’s peak of ₹74.84 per unit on the NSE. In the same vein, airport developer and operator GMR Airports also rose as much as 2.63% to ₹94.49 apiece.

Crude oil price fall

Brent crude oil futures for delivery in May had plunged as much as 11.02% to the session’s low of $88.05 per barrel, compared to the previous close of $98.96 per barrel. At the time of writing, it was trading 6.20% lower at $92.82 per barrel.

On Monday, the contract had surged to $119.50 per barrel, amid the intensifying war in the Middle East, which saw critical oil infrastructure across the region being hit. The shutdown of the Strait of Hormuz has been another primary factor impacting oil prices since the beginning of the conflict.

Similarly, West Texas Index (WTI) crude futures for expiry in April declined by 10.9% to the day’s low of $84.43 per barrel. It stood at $88.31 per barrel, down by 6.82% at the time of writing.

This fall in oil prices comes after the US President Donald Trump signaled that the War in West Asia would likely end very soon. At a conference in Florida, Donald Trump commented that the US is “achieving major strides towards completing our military objectives.”