Carnival, Royal Caribbean and Norwegian Cruise Line Holdings posted strong earnings for their most recent quarters despite rising fuel prices. How the leading cruise companies navigate fuel costs boils down to starkly different strategies.

Oil prices have skyrocketed since the U.S.-Israel war with Iran began on Feb. 28. Brent crude oil reached a six-month high on Friday, settling at $116.72 per barrel. With no clear end in sight for the conflict in the Middle East, the pressure affecting cruise ships' lifeblood seems poised to last into the holiday travel season and beyond.

Both Royal Caribbean and Norwegian practice "hedging," or a strategy of using derivatives to reduce exposure to future fuel-price swings, to account for sharp price changes.

Carnival CEO Josh Weinstein, on the other hand, told CNBC in an interview last month that cutting fuel consumption is the best way to avert the effects of expensive fuel.

"At the end of the day, fuel is an input cost for us. The best thing that we can do to control that cost is to use less," Weinstein said at the time.  

Jefferies analyst David Katz told CNBC in an interview that companies that hedge do so primarily to manage the cost of fuel, but also to manage Wall Street expectations and prevent hectic stock trading based on fuel price fluctuations.

"When you're public, the Street will trade your stock around based on the price of fuel," Katz said. "The Street's argument is that volatility puts pressure on your multiple."

"While it is mathematically most likely true that over the long term it is more expensive," he explained. "The benefit of having less fuel volatility in the model and less trading volatility is [it's] good for your multiple."

Despite the potential positives of the strategy, Carnival has maintained the stance it has held since 2019: Cutting fuel consumption works better than hedging.

And Carnival's third-quarter earnings report last month suggests the strategy may be paying off.

Weinstein told CNBC in an interview on "Squawk on the Street" following the release that the company has been "maniacal" about cutting its fuel consumption, saying it's slashed its unit fuel consumption rate by 26% since 2019.

"We estimate we've saved about $700 million in 2026 based on that consumption savings rate going down since 2019," he said.

Carnival spent $615 million, or about 7.3% of its revenue, on fuel in the third quarter, according to its most recent earnings release. That's an increase from the $425 million, or 6.7% of revenue, that the company spent on fuel in the fourth quarter of 2025, before fuel prices spiked.

Royal Caribbean similarly beat analyst expectations for earnings per share for its third quarter, reported Tuesday. However, it narrowly missed on revenue.

CEO Jason Liberty attributed the company's beat in part to its hedging strategy during an interview on CNBC's "Squawk on the Street" Tuesday morning. 

"We're a little bit over 60% hedged here for 2026, and so that's helping insulate us from some of the impacts on the rising fuel costs," he said. 

"It's obviously still impacting us," Liberty said. "[High fuel prices] evaporated a good chunk of our Q3 earnings beat into the full-year guide. But we're continuing to hedge, and we watch."

Royal Caribbean spent about $347 million on fuel in the third quarter, or about 6.2% of its revenue, according to its earnings release. That compares with $293 million, or 6.8% of revenue, spent on fuel in the fourth quarter of 2025, which ended on Dec. 31.

The company projects fuel costs will continue to rise to $379 million in the fourth quarter.

Liberty pointed out that high fuel prices have not dampened demand from consumers for vacations.

"It's not that we don't see points of challenges, but really what we've seen is that even in those points of challenges, the consumer comes roaring back," he said.

Royal Caribbean reported strong bookings for the third quarter and said reservations for 2027 are already up by a high-teens percentage.

Norwegian Cruise Line Holdings beat on both the top and bottom lines for its third-quarter earnings, reported on Thursday, with revenue of $2.9 billion and adjusted earnings per share of $1.12.

The company has hedged approximately 48% of its fuel consumption for 2026, according to the earnings release.

Norwegian spent about $196 million on fuel in the third quarter, or about 6.6% of its revenue, according to its most recent earnings release. That's a lower share of revenue than the 7.4% — totaling $167 million — spent on fuel in the fourth quarter of 2025, which ended on Dec. 31.

The company projects fuel consumption to rise slightly in the fourth quarter, up to 255,000 metric tons from 239,000 metric tons consumed in the third quarter.

The company is in the midst of a turnaround effort. And despite facing added challenges from the macro environment, CFO Mark Kempa said he is reassured by this quarter's results on an earnings call on Thursday.

"These results reinforce our confidence in the appeal of our products and the opportunity to translate stronger revenue performance and disciplined cost management into improved profitability," Kempa said.