Airlines are increasingly purchasing oil derivatives contracts to safeguard against rising fuel prices due to the Israel-Hamas conflict, reports BNN Bloomberg. The war has raised concerns about potential increases in fuel costs.
Despite oil prices returning to pre-war levels, airlines are hedging fuel expenses to mitigate the risk of sudden price spikes. This approach involves using various derivatives instruments, such as options contracts and swaps. Although there are risks involved, airlines have experienced gains from fuel-price protection measures recently.
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