Energy Stocks Fall as Crude Hits Lowest Since Iran War Start

Energy stocks declined in the afternoon session after crude oil fell to its lowest level since the start of the Iran war, as tankers resumed transit through the Strait of Hormuz and the U.S. and Iran signaled progress toward ending the conflict.

Reasons for the Move

The direct cause of the decline is the drop in crude oil prices, driven by two key factors:

• Resumption of Strait of Hormuz transit: Oil tankers have resumed crossing after a period of disruption, increasing expected supply.
• Diplomatic signals: Washington and Tehran indicated progress in talks to end the war, reducing the geopolitical risk premium.

Context

Energy stocks had a mixed performance over the past week, but the current move comes amid high sensitivity to any developments in the Middle East. The sector had benefited from higher oil prices earlier in the year due to the war.

Similar Moves in the Sector

The losses were not limited to a single company; declines included major firms such as:

• Exxon Mobil (XOM)
• Chevron (CVX)
• ConocoPhillips (COP)
• SLB (SLB)
• Phillips 66 (PSX)

This coordinated decline reflects the entire sector's exposure to crude oil prices, as the profits of these companies are closely tied to oil prices.