Oil prices experienced a sharp decline following the announcement of a temporary ceasefire between the United States and Iran. The decision, driven by President Donald Trump, includes a suspension of attacks for two weeks conditional on the safe reopening of the Strait of Hormuz.
Brent Loses Momentum After Weeks of Gains
As a result, Brent crude fell to $91.70 per barrel, a decline that comes after a period of strong gains, during which prices had risen more than 50% due to supply disruptions. Similarly, West Texas Intermediate also experienced significant declines after accumulating gains of nearly 70% since late February.
Market Reaction and Energy Stocks
Consequently, energy sector stocks suffered widespread declines in the United States and Europe. Companies such as Exxon Mobil and Chevron recorded declines exceeding 5% in pre-market trading, and other companies such as Occidental Petroleum, Devon Energy, Diamondback Energy, and ConocoPhillips experienced even greater losses.
In Europe, giants such as BP, Shell, Eni, TotalEnergies, and Repsol also declined sharply, while firms such as Equinor and Var Energi led the steepest drops.
Liquefied natural gas exporters, which had benefited from the conflict, also recorded notable losses. Companies such as Cheniere Energy and Venture Global saw their stock positions deteriorate following the market adjustment.
The Market Remains Focused on the Conflict
However, analysts warn that volatility will continue in the short term. The market remains conditioned by the development of negotiations and by any disruption in maritime transit.
Meanwhile, any sign of a breakdown in the agreement could trigger an immediate rebound in oil prices and the dollar.
Source: Reuters