Cruise companies aim to keep fuel costs down. Their strategies for doing so differ

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 swings in the price of fuel, to account for sharp increases.

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 fluctuations in the price of fuel.

"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.

Carnival beat analysts' expectations on both the top and bottom lines for its most recent quarter and reported an all-time high net income of $1.9 billion.

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.