What Happened?
A number of stocks fell in the afternoon session after 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.
The oilfield services sector acts as the industry's "first responder" to price volatility. When crude prices fall, exploration and production (E&P) companies typically respond by slashing capital expenditure. This immediate belt-tightening leads to canceled contracts for drilling rigs and completion crews, leaving service providers with expensive, idle equipment and a shrinking backlog of work almost overnight.
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 Transocean (NYSE: RIG) fell 6.1%. Is now the time to buy Transocean? Access our full analysis report here, it’s free.
- Oilfield Services company Valaris (NYSE: VAL) fell 6%. Is now the time to buy Valaris? Access our full analysis report here, it’s free.
- Oilfield Services company RPC (NYSE: RES) fell 8.5%. Is now the time to buy RPC? Access our full analysis report here, it’s free.
Zooming In On RPC (RES)
RPC’s shares are quite volatile and have had 16 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 previous big move we wrote about was 16 days ago when the stock dropped 4.9% on the news that signals of de-escalation in the U.S.-Iran conflict caused oil prices to fall, removing a key support for the energy sector. The drop in crude prices came after President Trump suggested the U.S. could wind down its military campaign against Iran within weeks, and Iran's president stated a readiness to end the war. This news unwound the "war premium" that had boosted oil stocks during the conflict. As a result, West Texas Intermediate (WTI) crude oil fell about 2% to trade below $101 a barrel. The decline was also fueled by traders taking profits after a strong run in energy stocks.
RPC is up 19.3% since the beginning of the year, but at $6.60 per share, it is still trading 9.9% below its 52-week high of $7.32 from March 2026. Investors who bought $1,000 worth of RPC’s shares 5 years ago would now be looking at an investment worth $1,311.
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