What Happened?
A number of stocks fell in the afternoon session after crude oil prices declined sharply as President Trump paused the Strait of Hormuz military escort and cited progress on a U.S.–Iran peace deal.
Oil and gas company profits move almost directly with the price of oil: when oil falls, revenue per barrel falls, and profit margins compress. The Strait of Hormuz is a critical oil chokepoint: approximately 20% of global oil supply passes through it daily. When the strait is at risk from conflict, oil carries a geopolitical risk premium as extra price built in to reflect supply uncertainty. When that risk eases, the premium disappears and prices return toward the underlying supply-and-demand level. OPEC+, the group of major oil-producing countries, separately announced 188,000 barrels per day of additional supply starting June 2026, which added to the downward price pressure independent of the peace deal.
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:
- Upstream Natural Gas E&P company Range Resources (NYSE: RRC) fell 3.9%. Is now the time to buy Range Resources? Access our full analysis report here, it’s free.
- Infrastructure company New Fortress Energy (NASDAQ: NFE) fell 4.1%. Is now the time to buy New Fortress Energy? Access our full analysis report here, it’s free.
Zooming In On New Fortress Energy (NFE)
New Fortress Energy’s shares are extremely volatile and have had 115 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 9 days ago when the stock gained 4.8% on the news that stalled peace talks between the United States and Iran caused a spike in crude oil prices amid ongoing supply disruptions.
The deadlock in negotiations led to the continued closure of the Strait of Hormuz, a critical chokepoint for global energy shipments. The disruption sent Brent crude to a three-week high near $108 a barrel, while WTI futures climbed above $96. This situation was described by the International Energy Agency (IEA) as the largest energy supply shock on record. In response, several financial institutions upgraded their forecasts.
Goldman Sachs raised its oil price forecast, citing supply disruptions from ongoing conflict in the Middle East. The investment bank expected Brent crude, a key international benchmark, to trade around $90 a barrel, up from its previous projection of $80. Similarly, the forecast for West Texas Intermediate was increased to $83 from $75. This optimism was echoed by major oilfield service providers like SLB and Baker Hughes, who anticipated a rise in global spending on oil exploration and production.
New Fortress Energy is down 30.6% since the beginning of the year, and at $0.77 per share, it is trading 89.1% below its 52-week high of $7.05 from May 2025. Investors who bought $1,000 worth of New Fortress Energy’s shares 5 years ago would now be looking at only $18.95.
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