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:
- Oilfield Services company Liberty Energy (NYSE:LBRT) fell 3.2%. Is now the time to buy Liberty Energy? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Viper Energy (NASDAQ:VNOM) fell 3.1%. Is now the time to buy Viper Energy? Access our full analysis report here, it’s free.
Zooming In On Liberty Energy (LBRT)
Liberty Energy’s shares are extremely volatile and have had 34 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 3.5% on the news that oil and gas prices surged amid reports the U.S. was planning an extended blockade of Iranian ports. Brent crude, a key international oil benchmark, rose 5% to nearly $117 a barrel, its highest level since the conflict with Iran began.
The price increase raised concerns that the situation, could persist for much longer, creating broad uncertainty in the energy markets. For oil and gas producers, higher commodity prices generally translate to increased revenues and profitability, which often makes their stock more attractive to investors. Adding to the volatility, the United Arab Emirates announced its departure from the OPEC oil cartel, introducing a new layer of uncertainty for global supply. This combination of geopolitical risk and rising commodity prices contributed to the broad market decline as investors grew more cautious.
Liberty Energy is up 72.9% since the beginning of the year, and at $32.65 per share, it is trading close to its 52-week high of $33.93 from May 2026. Investors who bought $1,000 worth of Liberty Energy’s shares 5 years ago would now be looking at an investment worth $2,492.
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