Asian oil and gas equities declined on Wednesday after Brent and WTI crude futures fell more than 2% amid reports that Iran and Oman had resumed talks on reopening the Strait of Hormuz.
Brent crude futures dropped 2.5% to $86.38 a barrel by 07:43 GMT, extending a two-day decline that exceeded $6 a barrel, according to analyst Tamas Varga of PVM. WTI futures fell 2.8% to about $80.08 a barrel, following a 3.1% drop on Tuesday. The strait, a critical chokepoint for global oil and LNG shipments, previously handled roughly one-fifth of seaborne energy trade before disruptions.
The discussions between Iran and Oman focused on an interim framework that would include a temporary navigational corridor and measures to clear mines, raising speculation that shipping restrictions could ease. Analysts cautioned, however, that a lasting resolution remains uncertain, with negotiations between Iran and the U.S. stalled and Washington maintaining economic pressure on Tehran.
Energy shares in Asia and Australia reflected the crude price decline. Australia’s S&P/ASX 200 Energy sub-index fell 1.5%, its steepest one-day drop in nearly a month. Woodside Energy slid more than 4%, while Santos lost nearly 2%. In South Korea, SK Innovation slumped 11%, and in Japan, Eneos Holdings and Japan Petroleum Exploration each declined more than 2%.
European energy stocks also retreated. BP dropped 2.8%, Shell fell 1.7%, and Equinor, Eni, TotalEnergies, and Repsol each slipped between 1.2% and 2.5%. The broader market reaction underscored the sensitivity of energy equities to crude price movements, particularly amid geopolitical developments affecting key shipping routes.
PVM’s Varga noted that while the reported talks provided a temporary boost to sentiment, the underlying supply risks in the region remain unresolved. He added that oil inventories are likely to continue depleting in the coming weeks, leaving markets in a precarious position despite short-term price volatility.
