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 Granite Ridge Resources (NYSE: GRNT) fell 1.8%. Is now the time to buy Granite Ridge Resources? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Riley Exploration Permian (NYSE: REPX) fell 6.1%. Is now the time to buy Riley Exploration Permian? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Chord Energy (NASDAQ: CHRD) fell 3.5%. Is now the time to buy Chord Energy? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Northern Oil and Gas (NYSE: NOG) fell 3.2%. Is now the time to buy Northern Oil and Gas? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Matador Resources (NYSE: MTDR) fell 3.4%. Is now the time to buy Matador Resources? Access our full analysis report here, it’s free.
Zooming In On Riley Exploration Permian (REPX)
Riley Exploration Permian’s shares are quite volatile and have had 18 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 biggest move we wrote about over the last year was about 1 month ago when the stock dropped 6.2% on the news that crude oil prices dropped amid easing geopolitical tensions in the Middle East.
Brent crude, the international benchmark, dropped by over 10% to below $90 a barrel, with U.S. West Texas Intermediate crude seeing a similar decline. The sharp sell-off was triggered by several developments, including a 10-day ceasefire between Israel and Lebanon and optimism surrounding potential U.S.-Iran negotiations.
Compounding the price pressure, Iran announced the reopening of the Strait of Hormuz, a critical chokepoint for global oil tankers. Easing tensions in the region reduce the 'risk premium' on oil prices, calming market fears about potential supply disruptions and leading to lower prices.
For US Shale, a retreat toward $90 puts the industry's "capital discipline" to the test. While core acreage in the Permian Basin would remain more profitable at these levels, the drop narrows the margin for error in higher-cost regions. Marginal wells that looked like "easy wins" at higher price points suddenly face "permitting paralysis" as operators reassess their internal rates of return against a more volatile backdrop.
Riley Exploration Permian is up 46.2% since the beginning of the year, and at $38.89 per share, it is trading close to its 52-week high of $41.21 from May 2026. Investors who bought $1,000 worth of Riley Exploration Permian’s shares 5 years ago would now be looking at an investment worth $1,111.
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