Delta Airlines (DAL) is on deck for quarterly earnings in tomorrow’s premarket session against a backdrop of geopolitical strife and skyrocketing oil prices versus resilient consumer travel demand. The Street’s expectations for EPS come in at $0.63 vs. $0.46 one year ago (+36.9%) and for $14.82B in revenue against $14.04B in the same period (+5.5%).

Airlines use very large amounts of oil, which poses a serious potential problem given the chaotic market for petroleum products due to the U.S.-Iran war. Delta, for example, used about 4.1B gallons of jet fuel in 2024 according to its company website. Consider that figure and then that jet fuel prices were about $195 at the end of March, representing a staggering $100 increase since the end of February, according to news reports.

Meanwhile, the Strait of Hormuz remains essentially closed to most commercial vessels. This critically important geographical choke point saw about 20 million barrels of crude oil and other petroleum products passing through its waters every day on average in 2025, according to the International Energy Agency. This represents about 25% of the world’s seaborne oil trade, so it’s easy to see why crude oil futures (/CL) are up about 70% since the war began on Feb. 28.

Delta CEO Ed Bastian recently said that the sharp increase in jet fuel prices makes for a $400M headwind even as strong travel demand could help offset this cost. However, unlike its competitors, Delta owns the Monroe Energy Refinery in Pennsylvania which allows it to produce its own fuel and additionally capture potential profits from refining. This puts Delta in the unique position of being better insulated from the wild fluctuations in oil prices than its peers, who typically must buy their fuel from third-party suppliers and could face harsh markups during times like these. This means Delta actually raised its revenue target for this quarter and expects earnings to remain steady as its refinery provides a hedge against fuel prices and additionally as wealthy flyers have shouldered the rising costs.

Bastian highlighted another difficult issue facing airlines and travelers alike; funding for the Department of Homeland Security and the Transportation Security Administration. Bastian last night said Delta was already seeing the impact of the partial government shutdown as about 50,000 officers work without pay and travelers face long security lines, according to news reports.

Delta’s chart shows a bounce from the 56 level, which was a repeated low point during September to November last year, and most recently early last month. However, price has taken a pause near the 68 level which roughly represents the high point after a gap down on Feb. 27. The options market projects a potential expected move of about +/- 4.80 (7.2%) for this weekly April 10 expiration, so traders could see some fireworks after earnings.

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