UK oil majors fell sharply in early trading as crude prices tumbled on hopes that a US-Iran agreement will reopen the Strait of Hormuz and ease pressure on global energy supplies.
BP PLC (LSE:BP.) dropped 3.88% to 513.74p, down 20.76p on the day, while Shell PLC (LSE:SHEL, NYSE:SHEL) slid 4.16% to 3,086.50p, a fall of 134p, as of 08:52 UK time. The moves tracked a broader sell-off in crude, with WTI down 5.68% at $80.06 a barrel and Brent off 4.94% at $83.
The fall followed reports that Washington and Tehran had reached a framework deal that could restore commercial shipping through Hormuz, one of the world’s most important oil transit routes.
Donald Trump said the agreement was “complete” and posted “Let the oil flow”, though the reopening is still expected to depend on a formal signing and the clearance of mines from the waterway.
The drop marks a sharp reversal from last week’s elevated prices, when Brent was still trading near $90 a barrel. Traders are now pricing in a material easing of supply risk, but the market is likely to remain sensitive to whether ships can move safely through the strait and whether Gulf oil flows return to normal.
