Shares in International Consolidated Airlines Group SA (LSE:IAG) and easyJet PLC (LSE:EZJ) fell on Monday as rising oil prices pushed up fuel costs for airlines. Brent crude climbed above $75 per barrel, marking its second consecutive session of gains.
Oil prices have been boosted by new US tariffs and sanctions on an Iranian crude supply network to China.
Meanwhile, US drilling activity remains subdued, with the total number of active oil rigs still lower than a year ago.
Market data also shows investors reducing their long positions in crude, indicating some uncertainty ahead.
However, with fuel being one of the biggest expenses for airlines, the continued rise in oil prices is putting pressure on airline stocks, weighing on the sector.
IAG was off 2.8% with easyJet down 1.1%.