What Happened?
A number of stocks fell in the afternoon session after hopes of a diplomatic breakthrough between the U.S. and Iran sent crude oil prices tumbling.
West Texas Intermediate (WTI) crude futures plunged more than 5% to fall below the $100 per barrel mark, while the global benchmark, Brent crude, also saw a significant drop. The sell-off was fueled by comments from U.S. President Trump indicating that talks with Iran were in their final stages, raising expectations that a conflict could be avoided. A de-escalation in Middle East tensions could lead to the restoration of oil supply from the region. The prospect of more barrels entering the market puts downward pressure on prices, as an increase in supply typically leads to lower costs for the commodity.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Mixed or Offshore Upstream E&P company Murphy Oil (NYSE: MUR) fell 3.3%. Is now the time to buy Murphy Oil? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company APA Corporation (NASDAQ: APA) fell 3.3%. Is now the time to buy APA Corporation? Access our full analysis report here, it’s free.
- Oilfield Services company Patterson-UTI (NASDAQ: PTEN) fell 3.2%. Is now the time to buy Patterson-UTI? Access our full analysis report here, it’s free.
Zooming In On Murphy Oil (MUR)
Murphy Oil’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock dropped 3.2% on the news that Iran submitted a new proposal for peace talks with the United States, signaling a potential de-escalation of geopolitical tensions.
The proposal was reportedly delivered via Pakistani mediators, leading to a drop in global oil prices. Brent crude, the international benchmark, fell about 2% to $108.20 a barrel, while West Texas Intermediate (WTI) saw a sharper decline of 3.7% to $101.17.
The potential for peace and the reopening of crucial shipping lanes like the Strait of Hormuz eases concerns about supply disruptions that had previously driven oil prices higher. For oil and gas companies, lower crude prices can directly translate to reduced revenues and profit margins, which is reflected in the negative performance of their stocks.
Murphy Oil is up 20% since the beginning of the year, and at $39.01 per share, it is trading close to its 52-week high of $42.74 from April 2026. Investors who bought $1,000 worth of Murphy Oil’s shares 5 years ago would now be looking at an investment worth $1,858.
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