TLDR
- Major oil producers including Exxon (XOM), Chevron (CVX), and ConocoPhillips (COP) tumbled in early trading following ceasefire news
- Crude prices plummeted with Brent down over 10% to $96.73 and WTI sliding nearly 14% to $95.45
- President Trump revealed a conditional two-week truce requiring Iran to fully reopen the Strait of Hormuz
- Energy stocks had rallied between 34% and 42% year-to-date amid escalating Middle East tensions
- Declining crude prices favor refiners such as Valero and Marathon while pressuring upstream producers and services firms
President Donald Trump’s late Tuesday announcement of a two-week truce involving the United States, Israel, and Iran triggered a dramatic selloff in energy markets, erasing recent gains that had lifted oil stocks to new heights.
The ceasefire revelation arrived just hours before Trump’s self-set April 7th ultimatum, disclosed at 8 p.m. Eastern Time. The president had previously threatened Iran with severe consequences unless it lifted its blockade of the Strait of Hormuz.
In a Truth Social post at 6:32 p.m. ET, Trump confirmed Iran had accepted ceasefire terms, contingent upon the “complete, immediate, and safe opening” of the critical shipping lane.
The Strait of Hormuz serves as the transit route for approximately 20% of global crude oil shipments. Its disruption had been instrumental in driving energy prices higher throughout recent months.
Crude oil markets had surged past $110 per barrel earlier in the week, following Trump’s weekend warning that American forces would strike Iranian infrastructure including power facilities and bridges unless the waterway was unblocked.
In the wake of the diplomatic breakthrough, Brent crude futures plunged more than 10% to settle at $96.73. West Texas Intermediate tumbled nearly 14% to $95.45, falling beneath the psychologically important $100 threshold.
Exxon Mobil (XOM) plummeted 6.3% during premarket sessions. Chevron (CVX) declined 4.8%, while Occidental Petroleum slid 8.5%. Independent producer APA dropped 10%, as Diamondback Energy and Devon Energy retreated 7.7% and 6.4% respectively.
ConocoPhillips (COP) similarly experienced substantial losses. The three dominant oil producers — Exxon, Chevron, and ConocoPhillips — had posted impressive gains of approximately 37%, 34%, and 42% respectively since the beginning of the year.
Quarterly Momentum Faces Reversal
Exxon Mobil recorded its strongest quarter ever in Q1 2026, surging 41%. Chevron advanced 36% during the identical timeframe. Both equities had extended their rallies following the outbreak of regional hostilities.
Exxon separately disclosed in a Wednesday regulatory filing that it anticipates oil output to decline roughly 6% in Q1 versus Q4 2025, attributable to operational disruptions across Qatar and the United Arab Emirates.
The energy giant projected that favorable pricing conditions would contribute between $2.1 billion and $2.9 billion to upstream segment earnings compared to the previous quarter. Nevertheless, volume interruptions are forecast to reduce combined upstream and downstream operations by $400 million to $800 million.
Exxon is scheduled to publish complete Q1 financial results on May 1.
Shell disclosed that liquefied natural gas output would similarly contract in Q1 owing to conflict-related impacts on Qatari facilities. Shell shares dropped 5.4% on the London exchange and 4.2% in U.S. premarket activity.
Refining Sector Poised for Upside
The energy landscape isn’t uniformly negative. Declining crude costs enhance profitability margins for refining operations.
Valero Energy, Phillips 66, and Marathon Petroleum represent refining companies positioned to capitalize on reduced oil input expenses.
Conversely, oilfield services providers including Halliburton and Schlumberger confront earnings headwinds similar to those facing integrated oil majors.
Trump indicated that the majority of disputed issues between Washington and Tehran have reached preliminary resolution. The two-week negotiating period aims to formalize these understandings.
Should the ceasefire prove durable and the Strait of Hormuz return to full operation, market analysts anticipate crude prices could experience additional downward pressure in coming weeks.
