Ceasefire between the United States and Iran affects oil: global energy stocks plummet

By Pooja Menon, Joel Jose, and Danilo Masoni

American and European energy stocks tumbled on Wednesday as a ceasefire in the Middle East conflict reduced the significant war premium integrated into oil prices due to fears of supply disruption through the Strait of Hormuz.

Oil fell below $100 a barrel after US President Donald Trump late Tuesday agreed to a two-week suspension of strikes on Iran, pending the immediate and safe reopening of the strait.

“The market’s initial reaction was significant, but sentiment will continue to be guided by headline risks,” said Achilleas Georgolopoulos, senior market analyst at broker XM.

“Any signs that the ceasefire is hanging by a thread can quickly reverse today’s risk improvement, with oil prices reacting first.”

Brent futures reached their lowest level in nearly a month at $90.40, dropping after record monthly gains in March due to supply disruptions related to the conflict.

Brent and US West Texas Intermediate oil have increased by 50.8% and 68.5%, respectively, since the end of February until April 7, when tensions in the Middle East disrupted the Strait of Hormuz, a vital oil transport corridor.

Matthew Ryan, head of market strategy at financial services company Ebury, said volatility is expected to remain high as markets assess ceasefire negotiations and maritime transport activity.

THE OIL SLUMP HALTS THE CONFLICT-DRIVEN RECOVERY

Energy sector stocks, which had surged earlier in the year due to rising oil prices, were behind the market decline.

Exxon Mobil and Chevron shares fell by over 5%, while producers like Occidental Petroleum, Devon Energy, Diamondback Energy, and ConocoPhillips lost between 5.1% and 7.5%. Oil service companies and refiners also saw a general decline.

Analysts at Capital One Securities said it would be a painful day for E&P (exploration and production) and most energy-related companies.

Liquefied natural gas exporters, who had benefited from high spot prices during the conflict, were among the hardest hit, with Venture Global and Cheniere Energy falling by 12% and 5.9%, respectively.

This decline follows a strong first quarter for the sector, where surging oil prices pushed the S&P 500 Energy index up by over 37%, making it the best-performing sector in the S&P 500 index, which dropped by about 4.6% during the same period.

Ashley Kelty, analyst at Panmure Liberum, said the pause could give markets more time to digest the conflict’s repercussions and evaluate the damage to facilities and the time needed to increase production.

LNG EXPORTERS, EUROPEAN MAJORS HIT HARDEST

In Europe, shares of TotalEnergies, Shell, BP, Eni, and Repsol fell by 4.6% to 7.7%.

Norwegian company Equinor dropped by 8.7%, while Var Energi and Aker BP lost 11.8% and 9.9%, respectively.

The European oil and gas sector saw the least performance, dropping by 2.6% and heading towards its biggest daily decline since April 2025. The index is still up by over 30% so far in 2026.

Elsewhere, the drop in oil prices boosted airline stocks, with United Airlines, Delta Air Lines, and American Airlines each gaining over 7%, offering relief after weeks of pressure from rising fuel costs.