Shares in BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) edged lower early on Monday, modest moves that nonetheless helped drag the FTSE 100 into the red because of their heavy index weightings.
The weakness reflected a softer oil price and a broader risk-off mood across global markets.
Crude prices fell as fears of an imminent escalation involving Iran eased.
Brent slipped to $62.19 a barrel, while US benchmark West Texas Intermediate was $58.84.
Although tensions remain high, there was no fresh disruption to supplies over the weekend, easing earlier concerns about output from the OPEC member.
At the same time, investor sentiment was unsettled by renewed geopolitical uncertainty elsewhere. Markets digested President Donald Trump’s push to bring Greenland under US control, alongside threats of tariffs on some European countries.
Equities weakened globally and gold climbed to new records, classic signs of investors trimming risk.
Oil has been under pressure for months amid worries that supply is running ahead of demand.
The International Energy Agency has warned of a sizeable surplus this year, although pockets of tightness persist, including disrupted shipments from Kazakhstan.
With a US holiday likely to thin trading volumes, energy stocks may remain sensitive to shifts in geopolitics and sentiment rather than company news alone.
BP fell 0.6%, while Shell was off 0.15% in early trading.