As talks for a resolution to the conflict in Iran continue, crude oil prices hit a three-month low, and prices at the pump are now averaging less than $4 per gallon. Optimism and hope are driving down fuel costs, and record-breaking demand for cruise vacations is all creating favorable conditions for the red-hot Carnival Corp. (NYSE: CCL). So is the cruise line still a strong buy for investors?

There are few companies more fuel-dependent than Carnival. The decline in oil prices turns what’s been a short-term headwind into a tailwind for the second half of the year. Management expects fuel prices to continue falling through the remainder of 2026.

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The cost of oil is just a part of the story, though, as Carnival’s fundamentals are already strong. Bookings and prices are both at record highs. Last quarter, Carnival raised its full-year outlook. Customer deposits in the first quarter reached a record of nearly $8 billion, a 10% increase from the prior year’s high. The stock is up 24% in the past month.

The bull case for investors is compelling. The cruise industry has made a remarkable comeback since the early days of the pandemic, and cruising has truly returned as a trendy form of travel. Demand is steep, and Carnival’s management recently launched a $2.5 billion buyback to reward shareholders.

If oil continues to fall, momentum will remain on Carnival’s side. Less expensive fuel will make good fundamentals look great. However, even if the Iran conflict is prolonged and talks remain fluid and uncertain, Carnival still has plenty of bullish momentum. The stock’s forward and trailing P/E ratios are around 13, and the analyst consensus is $35 per share, so Carnival is still priced fairly even after the recent increase.

Should you buy stock in Carnival Corp. right now?

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