Why are ASX 200 energy shares getting smashed on Tuesday?

ASX 200 energy shares are dramatically lower after US President Donald Trump signalled the Iran war may be over soon.

The ASX 200 energy sector is 3.4% lower, and it’s the only sector in the red as the rest of the market recovers from yesterday’s rout.

According to abc.net.au, President Trump said the Iran war was “very complete” and that the US was “very far ahead” of its four to five-week estimated schedule of attack.

ASX 200 energy shares are tumbling as oil prices rapidly retreat from nearly US$120 per barrel yesterday to less than US$90 per barrel today.

Here’s the impact on energy stocks so far today.

ASX 200 energy shares take a big hit

The market’s biggest ASX 200 oil share, Woodside Energy Group Ltd (ASX: WDS), is down 4.8% to $29.87 per share.

The Santos Ltd (ASX: STO) share price is down 3.6% to $7.37, and Ampol Ltd (ASX: ALD) shares are down 3.5% to $30.25.

The Karoon Energy Ltd (ASX: KAR) share price is down 9% to $1.82, while Beach Energy Ltd (ASX: BPT) shares are 5% lower at $1.11.

ASX 200 coal shares are also being hit.

The Yancoal Australia Ltd (ASX: YAL) share price is 5.3% lower at $6.79, while Whitehaven Ltd (ASX: WHC) shares are 2.7% down at $8.61.

The New Hope Corporation Ltd (ASX: NHC) share price is $4.95, down 4.5%.

Of the top 10 ASX 200 fallers on the market today, eight of them are energy shares.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up 1.2% on Tuesday.

Why are ASX 200 energy shares tumbling?

ASX 200 energy shares are tanking while the broader market is recovering from yesterday’s $90 billion wipeout.

The ASX 200 fell 3.2% yesterday, its largest single-day fall since ‘Liberation Day’ in the US in April 2025.

The drop followed an astronomical 25% surge in the Brent and WTI oil prices to almost $120 per barrel yesterday.

That was their highest level since the Russian invasion of Ukraine in 2022.

Oil prices skyrocketed amid fears that the war could become a long battle and that higher prices would lead to resurgent inflation worldwide.

Yesterday, Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq began cutting oil production due to disruptions in the Strait of Hormuz.

They did so because storage facilities are filling up quickly as tankers delay going through the Strait of Hormuz.

More than 20% of global oil and gas exports, mostly from Iran, Iraq, Qatar, and the UAE, pass through the strait, which sits between Iran in the north and Oman and the UAE in the south.

It is the only sea channel linking the Persian Gulf with the Gulf of Oman and the Arabian Sea.

Gas prices have also been affected by the Iran war, with UK, Europe, and Germany natural gas futures up by more than 25% in a week.

European gas prices skyrocketed after QatarEnergy suspended production at its Ras Laffan and Mesaieed complexes following an Iranian drone strike on a water tank at the site last week.

The company provides about 20% of the global LNG supply.

Oil prices remain 20% higher over the week despite an overnight fall during US trading and further declines in today’s Asia trading session.

Everything reversed course last night

Yesterday, there was fear in the market about whether the Iran war would become an entrenched conflict, potentially involving many nations over an extended period.

But it’s funny how fast things can change with Donald Trump in the White House.

All it took was some comments from President Trump to send the Brent and WTI crude oil prices back below US$100 per barrel overnight.

With oil trading again right now in Asian markets, both Brent Crude and WTI Crude are under US$90 per barrel as we speak.

Trading Economics analysts sum up what’s happened:

Brent crude futures fell below $95 per barrel on Tuesday after surging to nearly $120 in the previous session, as US President Donald Trump signaled that the war with Iran may be nearing its end and that the US military operation is progressing well ahead of its initial timetable.

Trump also said he plans to waive oil-related sanctions and have the US Navy escort tankers through the Strait of Hormuz in an effort to keep oil prices in check.

Adding to the downward pressure, G7 finance ministers said the group “stands ready” to release oil from strategic reserves if necessary, although no action has been taken so far.

Here’s what President Trump said

On Truth Social this morning, Donald Trump threatened to punish Iran if it disrupted shipping through the Strait of Hormuz.

If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far.

Yesterday, Trump posted:

Iran is no longer the “Bully of the Middle East,” they are, instead, “THE LOSER OF THE MIDDLE EAST,” and will be for many decades until they surrender or, more likely, completely collapse!

The post Why are ASX 200 energy shares getting smashed on Tuesday? appeared first on The Motley Fool Australia.

More reading

• What’s next for the Woodside share price?
• Why Coles, Pantoro Gold, Seek, and Woodside shares are falling today
• Santos share price is tumbling from an 18-month high: Buy, hold or sell?
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.