Aviation stocks rallied strongly as **crude oil prices hit pre-war levels, with **SpiceJet shares jumping **5.5% and **IndiGo gaining 5% in Thursday's trading session on June 25. According to Investing.com, IndiGo opened at ₹5,265 and climbed to an intraday high of ₹5,454, while SpiceJet opened at ₹12.39 and touched a high of ₹12.95. The gains came as oil prices extended losses for a second straight session, with Brent crude futures trading 1.22% lower at $72.97 per barrel compared to $73.41 at the previous close. Global benchmark Brent crude oil prices have declined 8.5% over the last five trading sessions, with oil prices dropping 24% in one month and 28% in the last three months. The rally reflects investor optimism over the 60-day timeline for US-Iran negotiations and reports of increased maritime trade via the Strait of Hormuz.
The dramatic price decline follows U.S. Energy Secretary Chris Wright's announcement that oil flows through the Strait of Hormuz have largely returned to pre-conflict levels, with more than 20 million barrels passing through the crucial shipping route over the past 24 hours. As reported by Reuters, Wright said at least 20 million barrels had passed through the strait in the previous 24 hours, though he noted that a full return to normal operations could take a few weeks as demining work in the area continues. The sharp reversal in oil prices follows signs of progress in talks between the US and Iran, easing concerns over potential supply disruptions in the Middle East. According to LiveMint, an initial accord reached last week to end the US-Israeli conflict with Iran has enabled tanker traffic through the Strait of Hormuz to resume, with Oman also opening temporary shipping routes to facilitate vessel movement. With the latest decline, oil prices have tumbled 42% from the $126-a-barrel peak touched on April 30, when the closure of the Strait of Hormuz stoked fears of a major supply disruption. Brent crude futures for August delivery declined $1.40, or 2%, to $72.40 a barrel, while U.S. West Texas Intermediate crude fell $1.12, or 1.6%, to $69 a barrel. The decline followed improving crude flows through the Strait of Hormuz after a preliminary U.S.-Iran agreement and the resumption of tanker traffic, with higher crude exports from the Middle East and ample near-term supplies softening the physical oil market.
Despite the recent price decline, airlines continue to benefit from government support measures implemented last month. The government capped ATF prices for domestic airlines and approved a ₹10,000 crore jet fuel stabilisation fund to ease airline cost pressures. These measures came after a nearly 2.5-fold increase in international ATF prices, which rose from ₹60.5 per litre in March 2026 to ₹142 per litre in May 2026. The softer crude prices are expected to reduce aviation turbine fuel (ATF) costs, one of the biggest operating expenses for airlines, with The Financial Express noting that airlines often benefit through lower fuel bills when crude prices fall. Lower crude prices are generally positive for airlines because aviation turbine fuel (ATF), which is linked to global oil prices, is one of their largest operating expenses, with a sustained decline in crude prices helping reduce fuel costs and support profit margins.
From a technical perspective, SpiceJet has witnessed a sharp rally of over 23% so far this month, supported by easing crude oil prices. According to Angel One's Rajesh Bhosale, the stock has formed a higher-high, higher-low structure and is trading above all key moving averages, indicating a strong bullish trend. Bhosale believes the stock is well-positioned to retest the ₹6,000 level in the near term, with investors advised to consider a buy-on-dips strategy, as the previous resistance zone around ₹5,200 now acts as crucial support. For IndiGo, while the stock has gained around 4%, it continues to be an underperformer and remains below its key moving averages. Bhosale noted that easing crude oil prices could provide further near-term support to the stock, with the potential to test the ₹14.5–15 range, though he prefers InterGlobe Aviation on declines. The crude oil price decline has created significant opportunities across multiple sectors beyond aviation, with oil marketing companies being the biggest beneficiaries as lower crude prices allow fuel retailers to earn stronger marketing margins. Paint companies such as Asian Paints and Berger Paints (India) are likely to remain on investors' radar as many key raw materials used in paint manufacturing are linked to petroleum products, while tyre makers including MRF and Apollo Tyres have moved into focus as materials such as synthetic rubber, carbon black and nylon tyre cords are derived from petrochemicals.
