Qantas Shares Climb 6% to Two-Month High as Oil Prices Tumble on US-Iran Talk Hopes, Easing Jet Fuel Pressure

SYDNEY — Shares of Qantas Airways rose more than 6% on Tuesday to their highest level in about two months, as a sharp drop in oil prices eased concerns about the airline's fuel costs.

Qantas stock gained 56 cents, or 6.36%, to close at A$9.36, after trading between A$9.11 and A$9.43. About 10.3 million shares changed hands. The airline's market value rose to about A$14 billion.

The shares reached their highest level since early September, according to Investing.com.

Oil slides

Global oil prices fell about 7% to 8% overnight, as hopes grew for negotiations involving the United States and Iran.

Lower crude prices are particularly important for airlines. Jet fuel prices have more than doubled since the United States and Israel went to war against Iran in late February, according to ABC News.

Qantas spends billions of dollars a year on fuel. In fiscal 2024, it spent A$5.32 billion on fuel, according to Reuters.

Early surge

Qantas shares jumped at the open, rising nearly 6% within the first hour of trading. The stock was among the best performers on the S&P/ASX 200 index on Tuesday.

Rival Virgin Australia rose even more sharply, gaining 8.87% to A$2.70.

Higher fares, fewer routes

Higher fuel costs have forced Qantas and its budget subsidiary Jetstar, as well as Virgin, to raise fares and suspend some less-profitable routes, particularly in regional areas.

If oil prices remain lower, airlines could see some relief in their margins, though analysts say it may take time for lower crude prices to feed through to jet fuel costs. It also remains uncertain whether travelers will benefit from cheaper fares.

Weekly gains

Qantas shares have gained nearly 11% over the past week, according to Market Index.

The stock remains down about 10% this year and about 10% over the past 12 months, after being pressured by the jump in fuel costs and concerns about travel demand.

Market backdrop

The broader Australian market was volatile on Tuesday. The ASX 200 rose early, dipped around midday amid reports of fresh U.S. strikes on Iran, and closed 0.34% higher at 8,886.8.

The Reserve Bank of Australia raised its cash rate to 4.85%, its highest level since 2008, in a split decision. The central bank noted that the economy is slowing, which could affect consumer spending on travel.

Energy stocks fell sharply on the oil price drop, with Woodside Energy and Santos among the decliners.

Dominant player

Qantas is Australia's largest airline. Together with Jetstar, it held about 65% of the domestic market at the end of 2024, according to Australia's competition regulator.

The airline has also faced competition from a revitalized Virgin Australia, which returned to the share market in 2025.

What's next

Qantas shares are likely to remain closely tied to oil prices and developments in the Middle East.

A lasting resolution that brings energy prices down could support airline profits, while renewed fighting could send oil and fuel costs higher again.

Investors will also watch for any updates from Qantas on fuel hedging, fares and demand ahead of the peak holiday travel season.