NEW YORK, June 13, 2026, 06:55 (EDT)
- Brent closed at $87.33 on Friday. WTI finished at $84.88. Prices slipped after traders bet on lower geopolitical risk following hopes for a U.S.-Iran deal.
- The Energy Select Sector SPDR ETF (XLE) closed at $57.55 on Friday, rising 0.77% for the session but staying about unchanged for the week.
- The focus now is on if a U.S.-Iran memorandum gets signed and if oil shipments through the Strait of Hormuz go back to normal levels.
Energy names closed out the week in a tricky spot, with oil sharply lower but the group hanging on. Brent, the global benchmark, dropped 3.37% to $87.33 a barrel by Friday’s settlement. U.S. benchmark WTI fell 3.23% to $84.88, as markets started to consider the odds of a U.S.-Iran deal. Crude’s slump usually weighs on oil producers’ cash flow and share prices, while a higher oil price can help earnings and stocks.
Energy shares were steadier than oil prices. XLE finished up 0.77% at $57.55 on Friday. Exxon Mobil added 0.27%, Chevron gained 0.74%, ConocoPhillips was up 1.40%, and Occidental Petroleum advanced 1.90%. For the five days, XLE held close to its June 5 close at $57.67. Investors didn’t completely step back from energy names after the late-week crude drop.
Traders are still focusing on the risk of a supply shock, not just today’s oil price. Reuters said a proposed memorandum could reopen the Strait of Hormuz and end the U.S. naval blockade on Iranian ports. Iran’s foreign minister said things could still change. The Strait of Hormuz usually carries about one-fifth of the world’s oil and LNG shipments. LNG is natural gas chilled to liquid form for shipping.
Friday’s drop looks driven by headlines, not a real green light for energy bulls, analysts said. “What’s got the market going down is the Iranians saying there is a memorandum of understanding,” John Kilduff at Again Capital told reporters. ING analysts, cited by Reuters, warned that if oil flows don’t pick up before rising summer demand, the market could hit an inflection point in late July. Reuters
Shell has paused its $3 billion buyback through July 14 due to securities laws linked to its $16.4 billion ARC Resources deal and ARC’s shareholder vote. Meanwhile, Reuters reported—citing Bloomberg News—that Exxon is looking at possible targets including Woodside Energy, which would add to its LNG business. Woodside’s U.S. shares gained 6% in the morning, Exxon ticked up 0.7%. Chevron CEO Mike Wirth said the company is still considering options in the Middle East, with regional countries offering “a fair balance of returns for investors.” Reuters
Energy stocks could still see earnings help if crude prices stay high, inventories remain low and geopolitical risks don’t fully go away. U.S. crude inventories dropped 7.2 million barrels in the week to June 5, a bigger draw than analysts forecast. The Baker Hughes rig count showed total U.S. oil and gas rigs down by one to 562 in the week to June 12, though oil rigs reached the highest since June 2025. Fewer rigs can mean slower supply growth ahead, which tends to prop up prices if demand stays steady.
The bear case is that if a deal gets signed and shipping rebounds, crude prices could quickly lose their war premium, maybe before analysts have time to cut their company earnings estimates. Refiners have another problem if margins keep shrinking—the EIA said the Gulf Coast 3:2:1 crack spread, a basic gauge of refining margins, dropped 5.5% at the June 11 close. OPEC cut its 2026 oil-demand growth view to 970,000 barrels per day from 1.17 million, which shows supply risk is only part of the story for oil stocks.
Energy stocks aren’t obvious bargains right now, but do carry some risk. XLE’s holdings showed a forward price-to-earnings ratio of 12.71 and a 30-day SEC yield at 2.63% as of June 11. The S&P 500 Energy sector was still up 26.95% so far for 2026, as of June 12. That multiple isn’t high if you compare it to growth names. But with the sector tied closely to oil, gas, and consumable fuels, where it goes next could come down to whether a U.S.-Iran deal gets signed this weekend, if Hormuz shipping stays open, and if crude inventories hold up without another rally.
