What happened?
A number of stocks fell in the afternoon session after crude oil prices tumbled as renewed diplomatic talks between the United States and Iran eased concerns over potential Middle East supply disruptions.
Brent crude fell by more than 4%, while broader crude benchmarks dropped 3% following reports that negotiators convened in Doha to develop a framework for an agreement. For energy producers, crude prices directly dictate top-line revenue and operating margins. When geopolitical tensions flare across vital oil-producing regions, markets build in a risk premium, which is an additional cost priced into commodities to compensate for potential disruption risks.
Progress in diplomatic dialogue deflates this geopolitical risk premium, pushing oil prices lower. As the threat of imminent disruption to global supply routes recedes, investors quickly recalibrate expected cash flows for exploration and production firms, leading to widespread declines across the energy industry.
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:
- U.S. shale E&P company Riley Exploration Permian (NYSE: REPX) fell 8%. Is now the time to buy Riley Exploration Permian? Access our full analysis report here, it’s free.
- Diversified upstream E&P company Occidental Petroleum (NYSE: OXY) fell 4%. Is now the time to buy Occidental Petroleum? Access our full analysis report here, it’s free.
- U.S. shale E&P company Permian Resources (NYSE: PR) fell 4.1%. Is now the time to buy Permian Resources? Access our full analysis report here, it’s free.
- U.S. shale E&P company Matador Resources (NYSE: MTDR) fell 6%. Is now the time to buy Matador Resources? Access our full analysis report here, it’s free.
- Mixed or offshore upstream E&P company Tidewater (NYSE: TDW) fell 3.9%. Is now the time to buy Tidewater? Access our full analysis report here, it’s free.
Zooming in on Riley Exploration Permian (REPX)
Riley Exploration Permian’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 6.2% on the news that crude oil prices dropped amid easing geopolitical tensions in the Middle East. Brent crude, the international benchmark, dropped by over 10% to below $90 a barrel, with U.S. West Texas Intermediate crude seeing a similar decline. The sharp sell-off was triggered by several developments, including a 10-day ceasefire between Israel and Lebanon and optimism surrounding potential U.S.-Iran negotiations. Compounding the price pressure, Iran announced the reopening of the Strait of Hormuz, a critical chokepoint for global oil tankers.
Easing tensions in the region reduce the 'risk premium' on oil prices, calming market fears about potential supply disruptions and leading to lower prices. For US Shale, a retreat toward $90 puts the industry's "capital discipline" to the test. While core acreage in the Permian Basin would remain more profitable at these levels, the drop narrows the margin for error in higher-cost regions. Marginal wells that looked like "easy wins" at higher price points suddenly face "permitting paralysis" as operators reassess their internal rates of return against a more volatile backdrop.
Riley Exploration Permian is up 80.9% since the beginning of the year, but at $48.11 per share, it is still trading 11.2% below its 52-week high of $54.18 from October 2026. Investors who bought $1,000 worth of Riley Exploration Permian’s shares 5 years ago would now be looking at an investment worth $1,822.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
