TLDR
- Major oil producers including Exxon, Chevron, and ConocoPhillips experienced significant premarket losses following ceasefire announcement
- Brent crude plummeted more than 10% to $96.73 while WTI tumbled nearly 14% to $95.45
- President Trump declared a conditional two-week truce requiring Iran to fully reopen the critical Strait of Hormuz
- Energy stocks had rallied between 34% and 42% year-to-date amid escalating Middle East tensions
- Declining crude prices create headwinds for oil majors while providing tailwinds for refining companies
President Donald Trump’s late Tuesday announcement of a two-week ceasefire involving the United States, Israel, and Iran triggered a dramatic collapse in oil markets, erasing substantial gains throughout the energy sector.
The surprise declaration arrived moments before Trump’s self-imposed April 7th ultimatum, delivered at 8 p.m. Eastern Time. The president had previously issued stern warnings that Iran would face catastrophic repercussions unless it reopened the strategically vital Strait of Hormuz.
Trump revealed the agreement via Truth Social at 6:32 p.m. ET, stating that Iran had accepted the ceasefire terms, which require the “complete, immediate, and safe opening” of the Strait of Hormuz.
This critical maritime chokepoint facilitates the transport of approximately 20% of global crude oil supplies. Its blockade had been a primary catalyst for elevated oil prices throughout recent months.
Oil prices had climbed above $110 per barrel earlier in the day, following Trump’s weekend threat to strike Iranian infrastructure including power facilities and bridges should the waterway remain obstructed.
In the aftermath of the ceasefire revelation, Brent crude futures plunged over 10% to $96.73. West Texas Intermediate crashed nearly 14% to $95.45, falling beneath the psychologically significant $100 per barrel threshold.
Exxon Mobil plummeted 6.3% during premarket sessions. Chevron declined 4.8%, while Occidental Petroleum sank 8.5%. Exploration company APA tumbled 10%, with Diamondback Energy and Devon Energy recording losses of 7.7% and 6.4% respectively.
ConocoPhillips similarly experienced substantial declines. The three dominant oil producers — Exxon, Chevron, and ConocoPhillips — had accumulated gains of approximately 37%, 34%, and 42% respectively since the beginning of January.
Year-to-Date Rally Faces Reversal
Exxon achieved its strongest quarterly performance on record during Q1 2026, soaring 41%. Chevron advanced 36% throughout the identical timeframe. Both energy giants had continued their ascent as regional hostilities intensified.
Exxon submitted a regulatory filing Wednesday indicating anticipated oil production will decline roughly 6% in Q1 versus Q4 2025, attributed to operational disruptions in Qatar and the United Arab Emirates.
The corporation projected that favorable pricing conditions would enhance upstream earnings by $2.1 to $2.9 billion compared to the previous quarter. Nevertheless, volume disruptions 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 due to conflict-related impacts on Qatari operations. Shell shares dropped 5.4% in London trading and 4.2% during U.S. premarket hours.
Refining Sector Positioned for Gains
Not every energy company faces negative consequences. Decreased crude costs enhance refining profit margins.
Valero Energy, Phillips 66, and Marathon Petroleum represent refining companies poised to capitalize on more affordable oil.
Oilfield services providers including Halliburton and Schlumberger, conversely, confront earnings challenges alongside the major oil producers.
Trump indicated that most disputed matters between the United States and Iran have reached consensus. The two-week period is designed to formalize these understandings.
Should the ceasefire prove durable and the Strait of Hormuz resume full operations, market analysts anticipate oil prices may experience additional declines in coming weeks.
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