What Happened?
A number of stocks fell in the afternoon session after the U.S. and Iran signed an interim agreement that would waive sanctions on Tehran's oil and reopen the Strait of Hormuz.
WTI futures fell as much as 3.5% to an intraday low of $73.60, the lowest since March 2, the first trading day after the initial US-Israeli strikes on Iran, while Brent crude dropped 2% to $77.96. The catalyst was a 14-point memorandum of understanding signed by the US and Iran, which begins a 60-day negotiation period. This stripped away the geopolitical risk premium that had been the energy sector's most powerful tailwind for months.
Under its terms, Iran will allow toll-free passage through the Strait of Hormuz immediately, with full traffic capacity restored within 30 days. Roughly 20% of the world's seaborne oil and LNG transits the strait. Saudi tankers and LNG carriers were already departing the Gulf region as shipping activity began to normalize. Oil reached as high as $120 per barrel at the peak of the conflict and fell nearly 29% in a month. That collapse reflects markets pricing in the return of Iranian barrels to global supply, barrels that had been sanctioned out of the market, alongside the reopening of the world's most critical energy shipping lane.
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 Halliburton (NYSE: HAL) fell 4.1%. Is now the time to buy Halliburton? Access our full analysis report here, it’s free.
- Oilfield Services company Patterson-UTI (NASDAQ: PTEN) fell 3.7%. Is now the time to buy Patterson-UTI? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company Talos Energy (NYSE: TALO) fell 3.6%. Is now the time to buy Talos Energy? Access our full analysis report here, it’s free.
Zooming In On Halliburton (HAL)
Halliburton’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 2.8% on the news that the price of oil fell sharply as the U.S. and Iran announced a peace deal to end their conflict.
The mechanism works through a tight chain of dependency. SLB, Halliburton, and Baker Hughes do not produce oil, they get paid only when producers drill wells.
A Permian shale operator that set its 2026 drilling budget assuming $100 oil now reassesses each planned well against $80 WTI. At lower prices, fewer wells clear the economic hurdle, and producers respond by deferring rig contracts, cutting hydraulic fracturing schedules, and cancelling completion equipment orders.
Halliburton is up 17.2% since the beginning of the year, but at $34.70 per share, it is still trading 19.3% below its 52-week high of $42.98 from May 2026. Investors who bought $1,000 worth of Halliburton’s shares 5 years ago would now be looking at an investment worth $1,578.
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