Carnival, Royal Caribbean, and Norwegian Cruise Line all reported robust third-quarter earnings despite rising fuel prices driven by ongoing conflicts in the Middle East. These cruise companies have adopted distinct approaches to managing fuel cost pressures. Royal Caribbean and Norwegian rely heavily on fuel hedging, using financial derivatives to lock in prices and reduce volatility. In contrast, Carnival focuses on aggressively cutting fuel consumption, a strategy its CEO Josh Weinstein believes to be more effective in controlling expenses.

Since February 28, oil prices have surged, with Brent crude reaching $116.72 per barrel recently, impacting operational costs for the cruise lines. Royal Caribbean’s CEO Jason Liberty highlighted that about 60% of their 2026 fuel needs are hedged, which helped buffer them from some cost spikes, though rising fuel still affected their earnings. Norwegian, with roughly 48% hedged, also sees fuel costs climbing while working through a company turnaround. Both continue to monitor fuel markets closely while sustaining strong customer demand.

Carnival’s approach centers on efficiency and fuel savings, which it has pursued for several years. The company reduced its unit fuel consumption rate by 26% since 2019 and estimates this has saved roughly $700 million in 2026 alone. Despite spending $615 million on fuel in Q3—about 7.3% of revenue—the company beat earnings expectations and projects fuel costs rising to $640 million in Q4. CEO Weinstein describes the fuel reduction effort as “maniacal” and credits it with significantly mitigating the impact of price hikes.

Looking forward, all three companies anticipate that fuel costs or consumption will continue to increase in the fourth quarter. While hedging offers some stability against market fluctuations for Royal Caribbean and Norwegian, Carnival’s focus remains on operational control and cutting usage. Despite these challenges, consumer interest in cruising remains strong, supporting positive bookings and revenue growth, with Royal Caribbean already reporting a high-teens percentage increase in 2027 reservations.