Delta Drops as Oil Surges

✈️ Delta dives as oil spikes on Middle East tensions, raising fuel costs and threatening airline profit margins.

June 16, 2025

Silver banana goes to…




In this issue of the peel:

  • ✈️ Delta dives as oil spikes on Middle East tensions, raising fuel costs and threatening airline profit margins.

  • 🛢️ Strikes on Israeli and Iranian energy sites push crude up—Big Oil now eyes spin-offs to capture geopolitical upside.

  • 🤝 Wall Street’s deal pessimism may be overdone, with M&A trends showing signs of life despite Q2 volume softness.

Market Snapshot

Banana Bits

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BOXABL has raised over $200M from over 50,000 investors since 2020. They recently achieved a significant milestone: raising over 50% of their Reg A+ funding limit! All BOXABL crowdfunding will close on June 24th, so it's time to take action.

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*Reserving a Nasdaq ticker does not guarantee a future listing on Nasdaq or indicate that BOXABL meets any of Nasdaq's listing criteria to do so.

Macro Monkey Says

Tariffs: America’s Growing Pocket Change 

Turns out Uncle Sam’s been quietly pocketing billions in change every time you buy that imported air fryer or Korean-made EV battery. 

According to the Wall Street Journal, the U.S. government collected a whopping $37.8 billion in tariff revenue between April and May—definitely not chump change. In fact, May alone delivered a record-setting $23 billion, up 20% year-over-year, as U.S. customs took a red pen to America’s ballooning deficit, which shrank by 9% compared to last year.

Tariffs were originally positioned as tools for negotiating better trade deals or protecting the domestic industry. But now, they’re also playing an increasingly important role in federal cash flow. That’s right: while Washington debates spending and taxes, tariffs have quietly become a top-shelf moneymaker—more lucrative in some months than corporate income taxes.

What’s driving the spike? Two words: China and Biden. Renewed tariffs on Chinese EVs, solar components, and semiconductors—plus the continuation of Trump-era duties—are boosting customs collections. 

While critics argue that the costs fall on U.S. businesses and consumers, the revenue has become a surprisingly reliable fiscal crutch. Whether tariffs will be expanded further is anyone’s guess, but for now, the Treasury's enjoying this quiet money printer.

The Takeaway?

Tariff collections are quietly climbing—$37.8 billion over two months—thanks to continued duties on Chinese imports and growing U.S. reliance on trade enforcement. 

May’s $23 billion haul set a new monthly record, helping shrink the federal deficit by 9% year-over-year. Though far from the $2 billion-a-day narrative once floated, tariffs are proving a low-key revenue stream. Consumers may grumble at higher prices, but the U.S. Treasury is smiling all the way to the bank. 

Career Corner

Question

Is it fine to directly schedule a call with someone at a (very small) boutique directly using their listed meeting booking link on LinkedIn or their website, or is it always better to email them first, particularly if their link shows tons of availability?

Answer

I think it's always best to introduce yourself at the outset. That way, you walk into the call warm vs. cold.

Head Mentor, WSO Academy

What's Ripe

Oracle Corp (ORCL) 7.7% 

  • Oracle extended its breakneck momentum into Friday, building on Thursday’s 13% rally following its blow-out fiscal Q4, where revenue hit $15.9 bn (+11% YoY) and cloud services rose 14% to $11.7 bn. 

  • CEO Safra Catz guided for cloud growth to climb from ~24% to over 40% in FY26, highlighting “dramatically higher” momentum. Buoyed by AI spend expectations and raised analyst targets, Oracle closed up 7.7% on Friday, solidifying its leadership in the cloud‑AI space.

CF Industries Holdings (CF) 6.5% 

  • CF Industries surged 6.5% on Friday, fueled by favorable U.S. biofuels policy and strong fertilizer fundamentals. 

  • The rally was in part driven by the Trump administration’s expanded biofuels mandate, heightening ammonia demand, while robust global nitrogen prices and fewer inventories boosted Q1 operating cash flow by nearly 32%. 

What's Rotten

Corpay (CPAY) 7.7%

  • Corpay dropped 7.7% on Friday, underperforming both the S&P 500 and its fintech rivals amid a sector-wide retreat. Despite a recent upgrade from “hold” to “buy,” the stock fell sharply as payment processors were hit by macro concerns and fears around emerging corporate stablecoin competition. High trading volume suggested a sustained pullback, possibly driven by profit‑taking after a strong prior run. 

Delta Air Lines (DAL) 3.8%

  • Delta’s stock slid 3.8% following a sharp decline in airline stocks as oil jumped over 9% amid Israel‑Iran tensions, raising fuel cost concerns and prompting flight diversions over Middle East airspace. 

  • The downturn reflected growing investor caution over airlines’ near-term profitability due to travel disruptions and rising expenses. Delta has also faced operational challenges earlier this year, which may have exacerbated investor unease ahead of broader market volatility.

Thought Banana

War, Oil & Inflation: Global Supply Chains Brace for Impact

Amid the renewed tensions between Israel and Iran, energy markets are feeling the squeeze, and the latest headlines reveal how global giants are responding underneath the radar. 

Over the weekend, Israel and Iran exchanged attacks on each other’s oil and gas facilities: drone strikes hit Iran’s South Pars natural gas complex, while Iranian missiles struck Israel’s Haifa refinery. Israel responded with strikes on Tehran’s main fuel depot and refinery. 

These moves pushed U.S. crude futures up 7.3%, topping $73 per barrel—the highest in four months—while Brent crude flirted with $75, as concerns over a possible Strait of Hormuz disruption intensified. 

In this backdrop, big energy companies like BP, Shell, and other supermajors not mentioned are apparently mulling strategic moves to insulate their portfolios. Some are exploring spin‑offs of refining and retail segments to create leaner organizations focused on volatile upstream profits. Think of it as energy firms divesting their low-margin “gas station” side gigs so they can chase geopolitical premium oil profits—and maybe even claim the “agile edge” when oil spikes. 

If these spin‑offs land, investors could gain clearer plays: upstream pure‑plays capturing geopolitical upside, and refiners that benefit from retail pricing. It's like slicing a banana into two: one half gives you a quick sugar rush (upstream gains), and one half is more reliable but slower fuel revenue.

A 7% spike in crude may not sound dramatic on its own, but it spells trouble for downstream industries—think transportation, aviation, chemicals, and manufacturing—where margins are tight and energy is a major input cost. Delta Air Lines just warned of rising jet fuel prices, and logistics providers are already adjusting Q3 hedges.   

The Takeaway?

Strikes on Israeli and Iranian energy facilities boosted oil prices by over 7%, pushing U.S. crude past $73 and stoking fears over potential Strait of Hormuz disruptions. In response, major energy firms are considering refining-and-retail spin‑offs to sharpen focus on upstream volatility and geopolitical upside. 

This corporate slicing could yield clear investment plays: one pure-play for crude geopolitics, the other steady retail revenue. So, yes—energy markets might just be getting a banana split.

The Big Question: So the big question is whether oil-driven inflation could derail the fragile progress on global disinflation? Or worse—could it reignite the kind of trade-policy firefight that puts a chill on global commerce?

Banana Brain Teaser

Previous

If 3 < x < 100, for how many values of x is (x/3) the square of a prime number?

Answer: 3

Today

In a small snack shop, the average revenue was $400 per day over a period of 10 days. During this period, if the average daily revenue was #360 for the first 6 days, what was the average daily revenue for the last 4 days?

Send your guesses to [email protected]

❝

Formal education will make you a living; self-education will make you a fortune.

Jim Rohn

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Happy Investing,
Chris, Vyom, Ankit, Mithun, Colin & Patrick