Oil slides below US$100 as tensions shift, ASX energy stocks pull back

Oil prices dropped below key levels, with both major benchmarks declining after a shift in the latest geopolitical developments.

According to Trading Economics, WTI crude is trading around US$89.70 per barrel, down about 8.7% on the session. Brent crude is near US$100.60 per barrel, after falling roughly 10.3%.

This follows a pullback in prices after recent gains linked to supply disruptions across the Middle East.

Shift in expectations weighs on prices

Recent reports indicate that the United States has paused planned strikes on Iranian energy infrastructure for five days following high-level discussions.

Markets seem to have interpreted this as a possible step toward easing tensions.

Earlier, oil prices surged as tensions between the US and Iran raised fears about supply routes, particularly through the Strait of Hormuz. This chokepoint handles roughly 20% of global oil flows.

With the immediate risk of disruption appearing lower, traders appear to have adjusted their expectations, leading to a decline in prices.

Volatility remains elevated

Despite the recent pullback, oil remains higher on a longer-term basis.

Brent crude is up around 38% since the start of the US-Israel conflict involving Iran. Prices briefly moved above US$110 per barrel, up from around US$70 before the conflict.

Recent trading also highlights how quickly prices are moving. Brent has recorded large swings within a single session as markets reacted to escalating updates.

These moves have been driven by changing expectations around supply risk.

ASX energy stocks move lower

The drop in oil prices weighed on local energy stocks in early trading today.

Woodside Energy Group Ltd (ASX: WDS) shares were down about 3.5% in early trading to $33.56. The stock remains roughly 20% higher over the past month.

Santos Ltd (ASX: STO) shares also declined, falling around 3% to $7.82. The company’s shares are still up about 14% over the same period.

Ampol Ltd (ASX: ALD) shares were down about 0.8% to $33.19. In contrast, Viva Energy Group Ltd (ASX: VEA) shares rose approximately 2.3% to $2.43.

Coal stocks also moved lower, with Whitehaven Coal Ltd (ASX: WHC) down about 2% and New Hope Corporation Ltd (ASX: NHC) slipping around 1%.

Foolish takeaway

Oil prices have fallen as immediate supply concerns have eased, though they remain above pre-conflict levels.

While there have been no confirmed disruptions to production or shipping, recent price movements have been driven by changes in expectations.

Moves across ASX energy stocks seem to have followed these changes in oil prices, rather than any new specific updates from the companies themselves.

The post Oil slides below US$100 as tensions shift, ASX energy stocks pull back appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.