Aviation-related stocks traded mixed on Monday after intensified tensions in the West Asia pushed oil prices higher. InterGlobe Aviation (IndiGo) shares tanked 6.3 in trade on the BSE, logging an intra-day low at 4,265.6. At 9:17 AM, InterGlobe Aviation (IndiGo) share price was trading 6.37 per cent lower at ₹4,265.6 per share. In comparison, the BSE Sensex was up 1.68 per cent at 76,246.44.
However, SpiceJet shares touched 5 per cent upper circuit at ₹12.88 per share.
The stocks moved after oil prices surged above $100 per barrel as escalating tensions in West Asia spooked investors. Last check, Brent crude oil futures were up 7.32 per cent at $102.17 per barrel.
Generally, when crude oil prices rise, air turbine fuel (ATF) prices follow, and since airlines cannot immediately pass on the full increase to passengers through higher ticket prices without risking demand destruction, margins get squeezed almost instantly.
Oil prices rallied on Monday after reports suggested the United States (US) Navy prepared a blockade of the Strait of Hormuz that could restrict Iranian oil shipments after the US and Iran failed to reach a deal to end the war over the weekend.
US President Donald Trump said on Sunday the US Navy would start blockading the Strait of Hormuz, raising the stakes after marathon talks with Iran failed to reach a deal to end the war, jeopardising a fragile two-week ceasefire.
He added that the price of oil and gasoline may remain high through November's midterm elections, a rare acknowledgement of the potential political fallout from his decision to attack Iran six weeks ago.
US Central Command said US forces would begin implementing the blockade of all maritime traffic entering and exiting Iranian ports at 10 a.m. ET (1400 GMT) on Monday.
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"Not only does this restrain exports from Persian Gulf oil producers, but it will also restrict Iran's ability to export oil and will exacerbate the supply disruptions the market is experiencing," ANZ analysts Brian Martin and Daniel Hynes said in a note.
Meanwhile, Iran's Revolutionary Guards said on Sunday that any military vessels attempting to approach the Strait of Hormuz would be considered a violation of the two-week US ceasefire and be dealt with harshly and decisively.
Despite the stalemate, three supertankers fully laden with oil passed through the Strait of Hormuz on Saturday, shipping data showed. They appeared to be the first vessels to exit the Gulf since the ceasefire deal was struck last week.
Motilal Oswal Financial Services, in its report dated March 25, 2026, noted that the ongoing airspace disruption due to the West Asia conflict represented a meaningful near-term earnings overhang for IndiGo, driven by a combination of network dislocation, revenue loss, and elevated cost pressures. The supply-side nature of the shock limits mitigation, with cancellations and booking softness likely to weigh on Q4FY26 performance.
While demand fundamentals remain intact and recovery should be swift once normalcy resumes, the concurrent fuel cost spike, rerouting inefficiencies, and forex headwinds could extend margin pressure beyond the disruption window, thereby impacting earnings visibility to early FY27 despite partial offsets through pricing actions. Over the longer term, the brokerage remains confident in the company’s growth strategy.
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