Stock Markets May 6, 2026 07:55 AM

Oil shares slump as Brent slips under $100 after U.S. pauses Strait of Hormuz operation

President announces temporary halt to 'Project Freedom' amid talks with Iran; crude prices and energy stocks fall sharply

By Hana Yamamoto BP SHEL OXY

Oil prices fell steeply and energy stocks dropped worldwide after U.S. President Donald Trump said he would suspend a U.S. military action called "Project Freedom" aimed at reopening the Strait of Hormuz while talks with Iranian representatives continue. Brent crude fell below $100 a barrel and U.S. and European oil companies recorded notable losses ahead of the U.S. open.

Oil shares slump as Brent slips under $100 after U.S. pauses Strait of Hormuz operation
BP SHEL OXY

Key Points

  • President Trump said he would pause "Project Freedom" while negotiations with Iranian representatives continue, citing "great progress" toward a "complete and final agreement."
  • Brent crude fell more than 10% to around $97.97 per barrel and West Texas Intermediate dropped over 11% to $90.35, pushing energy stocks lower across Europe and the U.S.
  • European majors and U.S. producers posted sizeable declines: BP, Shell and TotalEnergies fell sharply in London; Occidental, Marathon, ConocoPhillips, Chevron and ExxonMobil were down in U.S. premarket trading.

Oil markets and energy equities slid on Wednesday after President Donald Trump announced a pause to the U.S. military operation known as "Project Freedom," which had been intended to reopen the Strait of Hormuz. The president said the suspension would be brief while negotiators see whether discussions with Iranian representatives can reach a conclusion.

Trump framed the decision as reflecting "great progress" toward a "complete and final agreement," and said the pause would last a "short period" while officials determine whether those negotiations can be finalized. The move followed prior disruptions related to the Strait of Hormuz earlier in April, when Iran reopened the waterway before closing it again after the U.S. announced it would not lift its blockade of Iranian ports.

Crude reacted sharply to the news. Brent futures dropped more than 10% to about $97.97 per barrel, slipping below the psychologically important $100 threshold. U.S. West Texas Intermediate declined over 11% to $90.35 per barrel. The price moves came alongside broad weakness in energy equities across European and U.S. markets.

In London, major European oil companies saw steep declines. BP fell more than 5% to 542.2p, Shell declined 4.5% to 3,165.5p, and TotalEnergies dropped 5.4% to 375.07. Across the Atlantic, U.S. energy names were set lower in premarket trading: Occidental Petroleum led the pack with a premarket decline of 7.6%, Marathon Petroleum fell 6.3%, ConocoPhillips was off 5.4%, Chevron declined 5.1%, and ExxonMobil slid 4.9%.

Market participants reacted to the prospect that tensions in the Gulf could ease if negotiations with Tehran advance. That prospect supported broader market gains elsewhere even as energy benchmarks and energy stocks retraced recent strength.

Still, the president cautioned in a post on Truth Social that the existing blockade would "remain in full force and effect" during the pause. That caveat left an element of uncertainty about how long the suspension would last and whether the situation could change if talks falter.


Market context

  • Brent fell to approximately $97.97 per barrel, down over 10%.
  • West Texas Intermediate traded near $90.35 per barrel, down more than 11%.
  • European and U.S. energy stocks recorded significant premarket and intraday losses following the announcement.

Outlook

The announcement has driven a rapid reassessment of near-term oil supply risk and pushed energy names lower, while simultaneously contributing to a lift in other parts of global markets on the prospect of reduced Gulf tensions. How talks with Iranian representatives proceed, and whether the blockade is ultimately modified, will determine the durability of recent price moves.

Risks

  • Negotiations may not conclude successfully, leaving oil supply risks unresolved and creating further volatility for the energy sector and global markets.
  • The U.S. blockade will "remain in full force and effect" during the pause, a condition that maintains the possibility of renewed disruption and continued market sensitivity, particularly for energy and shipping-exposed sectors.
  • Rapid price moves in crude could pressure energy company earnings and investor sentiment in the near term, affecting both oil producers and broader market indices.

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