Energy Stocks Tumble as Iran Conflict De-escalation Sinks Oil

Oil majors fall up to 5% as geopolitical risk premium unwinds on peace hopes

Energy Market Overview

Oil prices fell for the second consecutive day on fresh hopes for a swift end to the Iran conflict, unwinding the geopolitical risk premium that had driven crude above $100 per barrel. The retreat follows a 51% surge in crude oil prices in March, marking their largest monthly gain in nearly six years. Energy stocks declined broadly in afternoon trading as de-escalation signals removed a key support for the sector, with multiple E&P names trading lower.

Oil & Gas Majors

$XOM shares fell 5% in midday trading Wednesday, while $CVX also dropped 5% and was down 4.5% late in the session, on track for its worst decline in almost one year. Reports that Iran's President is prepared to end the ongoing conflict catalyzed the selloff across the major integrated oil companies. $COP closed at $128.38, marking a 2.74% decline from the prior day, while downstream player $PSX fell 3.59% to close at $175.64.

E&P and Oilfield Services

$DVN has seen recent momentum with a 30-day share price return of 8.1% and a 90-day gain of 32.7%, though the stock declined Wednesday along with other E&P names. $HAL acquired Sekal AS, a digital drilling autonomy company, to expand its drilling automation capabilities by integrating its LOGIX autonomous drilling platform with Sekal's DrillTronics software, though the stock closed down 2.54% at $38. $SLB also declined 2.65% to settle at $50.03, while offshore contractor Subsea7 won a contract for the Aseng gas monetisation project linking the field to the existing Alen platform.

Utilities and Gas Infrastructure

$NEE share price has climbed 15.66% over the past 90 days, with a 1-year total shareholder return of 35.66% as investors weigh momentum alongside utility fundamentals. The company is back in focus after the U.S. approved development of up to 10 gigawatts of natural gas generation in Texas and Pennsylvania under a new U.S.-Japan trade agreement, with Japan committing $550 billion to the partnership.

Looking Ahead

Market attention will remain focused on developments in the U.S.-Iran conflict, with any further signs of de-escalation likely to pressure oil prices and energy equities. The sharp reversal from March's 51% oil price surge suggests traders are rapidly repricing geopolitical risk, creating volatility for energy stocks heavily exposed to crude price movements. Investors will monitor whether the recent diplomatic signals translate into a sustained resolution or prove temporary.

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