What Happened?
A number of stocks jumped in the afternoon session after Iran ruled out extending a 60-day memorandum of understanding with the United States.
The June 17 memorandum was meant to reopen Hormuz while the two sides negotiated a nuclear deal within 60 days, CNBC reported. President Trump told Fox News he has “no time schedule” and is “not in a hurry.” A senior Iranian official told Reuters that Tehran would shift from defense to offense if diplomacy fails. Energy stocks rebounded because they (energy companies) make more money when oil is scarce and expensive. If the strait stays blocked, less crude reaches the market, so the price of each barrel rises.
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:
- U.S. Shale E&P company Matador Resources (NYSE: MTDR) jumped 3.2%. Is now the time to buy Matador Resources? Access our full analysis report here, it’s free.
- Oilfield Services company Oceaneering (NYSE: OII) jumped 3.3%. Is now the time to buy Oceaneering? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Northern Oil and Gas (NYSE: NOG) jumped 3.2%. Is now the time to buy Northern Oil and Gas? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company Talos Energy (NYSE: TALO) jumped 3.3%. Is now the time to buy Talos Energy? Access our full analysis report here, it’s free.
Zooming In On Talos Energy (TALO)
Talos Energy’s shares are extremely volatile and have had 30 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 7 days ago when the stock gained 6.9% on the news that Brent crude failed to break below $80 and rebounded to the mid-$80s, as traders kept a geopolitical risk premium priced into oil despite ongoing Strait of Hormuz negotiations.
Over the previous 24 hours, the UAE-vessel incident reversed the earlier price drop that had assumed a path to de-escalation. At the same time, Kpler data from the previous two days showed shipping traffic through the Strait of Hormuz plummeted about 33%, with only a handful of vessels crossing daily. Concurrently, Iran’s Parliament reviewed a bill that would permanently ban U.S., Israeli, and other “hostile” vessels from the waterway and impose heavy cargo fines — a legislative signal that the restriction could become more formal, not less. E&P equities are a leveraged claim on the price of oil.
When traders mark crude higher because a major export corridor looks less secure, expected cash flows for producers with high operating leverage to WTI and Brent rise in the same step. The mechanism is direct: a physical drop in Hormuz transit volumes and a fresh attack risk premium raise the probability of tighter near-term supply; higher spot crude then directly feeds revenue and free-cash-flow estimates for Devon, Diamondback, EOG, and peers. That is a re-pricing of supply-shock risk, not proof of a multi-year demand boom.
The move still leaves open whether Hormuz flows stabilize, whether the Iranian bill advances, and whether diplomacy can reassert itself as the dominant narrative. The next confirmation or challenge will come from daily tanker-crossing data, any further incidents in or near the strait, and whether Brent holds above the levels set by this weekend’s risk spike.
Talos Energy is up 45.9% since the beginning of the year, and at $16.41 per share, it is trading close to its 52-week high of $16.59 from May 2026. Investors who bought $1,000 worth of Talos Energy’s shares 5 years ago would now be looking at an investment worth $1,692.
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