Shares in energy giants Exxon Mobil (XOM), Chevron (CVX), and ConocoPhillips (COP) plunged on Friday morning after crude oil prices suffered a meltdown following the surprising reopening of the critical Strait of Hormuz.
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Iran Says Hormuz is ‘Completely Open’
Abbas Araqchi, Iran’s foreign affairs minister, in a post on X on Friday announced that the waterway is now “completely open” for the duration of the 10-day ceasefire agreed between Israel and Lebanon on Thursday. This comes as the U.S.-Israel-Iran war has led to the effective closure of the strait — through which about a quarter of the world’s oil shipments pass — throwing global markets into the worst energy crisis in history.
In addition, President Donald Trump on Friday also indicated that a peace deal could be reached “fairly soon” in the conflict.
Oil Rout Deepens as Hormuz Reopens Temporarily
Following the updates, crude oil futures — which dropped below $100 on Wednesday on hopes of a second round of peace talks between the U.S. and Iran — sank further.
As of 10:30 a.m. EST, the global crude oil futures benchmark Brent (CM:BZ) and the key U.S. oil gauge West Texas Intermediate (CM:CL) both plunged by roughly 10%, hitting around $89 and $83 per barrel, respectively.
What Does This Mean for Big Oil Stocks?
Upstream and integrated energy producers generally benefit from higher oil prices, as a large portion of their revenue is directly tied to the prices of crude and other energy products.
However, when crude prices fall, profit margins and investors’ risk appetite for the sector often weaken, even as share prices tend to move in tandem with swings in the commodity.
Moreover, the update comes as Wells Fargo analysts earlier this week called for profit-taking in the sector, predicting at least some form of hit to recent gains.
Which Is the Best Oil Stock to Buy?
Texas-based ConocoPhillips (COP) remains the standout name among major oil companies based on upside potential, according to TipRanks’ Best Oil Stocks tool.
The company’s shares offer about 22% price appreciation potential over the months ahead based on an average price target of $137.72. However, analysts continue to rate COP a Moderate Buy.
