Shell and BP plummet after Trump declares ceasefire with Iran
FTSE 100 oil stocks plunged in early morning trading as Brent prices fell after US President Donald Trump declared a two week ceasefire with Iran.
Oil giant Shell suffered a 7.1 per cent slump, trading at 3,311.4 pence, bringing its rally over the course of the Iran war to a screeching halt.
Rival BP recorded a 8.3 per cent loss, trading at 547.8 pence.
Oil and gas companies had been one of a small number of stocks to benefit from the closure of the Strait of Hormuz following the outbreak of war in Iran.
The closure of the waterway, which is responsible for transporting a fifth of the world’s oil, led to the choking of oil and gas, leading energy prices, ranging from crude to jet fuel spiralling.
But the temporary reopening of the passageway, albeit with conditions imposed by Iran, has raised hopes the supply of energy through the Strait could resume to normal levels.
Brent crude oil price plummeted 13.5 per cent to $94.5 during Wednesday trading, while the West Texas Intermediate slumped the most in nearly six years following the initial ceasefire announcement.
FTSE 250 losses
FTSE 250 energy companies also felt the impact, with Harbour Energy tumbling 5.9 per cent to 272.6 pence.
Ithaca Energy suffered a bruising fall, declining nine per cent to 234.6 pence, while Energean dipped 1.4 per cent.
Diversified Energy Company also fell 5.8 per cent to 1,218 pence.
Despite the fall in oil prices and share prices, analysts do not expect a return to pre-war levels for some time, as the damage to a number of oil fields and production plants in the Gulf will take time to repair.
James Hosie, Equity Analyst at Shore Capital, said: “A two-week ceasefire agreement between the US, Israel and Iran including the opening of the Strait of Hormuz marks a welcome step back from the threatened escalation of the conflict.
“Even if this ceasefire becomes a more lasting peace agreement, we do not expect oil and gas prices to return to their pre-conflict levels as it will take time for industry operations in the Persian Gulf to normalise.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said oil prices will “likely remain choppy” until a permanent resolution is found, while a reopening of the strait without Iranian control will also be crucial.
He said: “The return of free-flowing traffic through the Strait of Hormuz, without any Iranian tolls or controls, feels essential if oil prices are going to start trending back toward levels we saw before the conflict began.”
But, Iran’s foreign minister said passage through the strait for the next two weeks under the management of the Iranian military.
Shell trims gas production
The drop in energy share prices also comes as Shell releases its first quarter trading update, with the oil giant forced to trim its outlook following strikes on its Qatar site.
Integrated gas production fell to 880,000 to 920,000 barrels of oil equivalent per day, compared with 948,000 in the fourth quarter of 2025, reflecting the impact of the war on Qatar volumes.
Shell initially forecast production to be within a range of 920,000 to 980,000 barrels.
Iran’s retaliation strikes across the Gulf damaged Shell’s key asset, the Ras Laffan complex in Qatar, while other ventures in Iraq, Oman and the UAE also felt the impact of attacks.
Ras Laffan is home to the world’s largest LNG export terminal, supplying a fifth of global seaborne shipments but suffered “extensive damage” that will take roughly a year to repair.
But the group’s oil trading results, which are included under its chemicals and products unit, were “significantly higher” than the prior quarter.
The group expects refining margins per barrel, the profit earned for converting oil into gas and diesel, to hit $17 up from $14 in the final quarter of 2025.