Asian energy shares retreated on Tuesday after Brent and WTI crude futures fell more than 2% following reports of resumed talks between Iran and Oman regarding the Strait of Hormuz.
Brent crude futures dropped 2.5% to $86.38 per barrel by 04:43 GMT, while WTI futures declined 2.8% to about $80.08. The declines extended Tuesday’s losses, with Brent down over $6 per barrel over two sessions. The Strait of Hormuz, a critical chokepoint for global oil and LNG shipments, has been a focal point amid heightened geopolitical tensions.
Negotiations between Iran and Oman focused on a provisional shipping agreement, including a temporary transit corridor and mine-clearing cooperation. The talks occurred against the backdrop of stalled U.S.-Iran negotiations and Washington’s intensified economic pressure on Tehran. Analysts cautioned that any easing of supply risks remains uncertain.
Regional energy equities mirrored the decline in oil prices. In Australia, Woodside Energy fell more than 4%, while Santos dropped nearly 2%. The S&P/ASX 200 Energy sub-index slid 1.5%, marking its largest single-day drop in nearly a month. South Korea’s SK Innovation plummeted 11% after the news.
Japanese energy firms also saw declines, with Eneos Holdings and Japan Petroleum Exploration each falling more than 2%. European majors followed the trend: BP dropped 2.8%, Shell fell 1.7%, Equinor declined 2.5%, Eni lost 1.7%, TotalEnergies fell 1.2%, and Repsol dropped 1.4%.
Tamas Varga, an analyst at PVM, noted that a permanent resumption of Strait of Hormuz flows remains uncertain despite the reported agreement. He added that supply risks persist, with oil inventories expected to draw down in the coming weeks.
