What Happened?

A number of stocks fell in the afternoon session after the U.S. and Iran signed an interim agreement that would waive sanctions on Tehran's oil and reopen the Strait of Hormuz. 

WTI futures fell as much as 3.5% to an intraday low of $73.60, the lowest since March 2, the first trading day after the initial US-Israeli strikes on Iran, while Brent crude dropped 2% to $77.96. The catalyst was a 14-point memorandum of understanding signed by the US and Iran, which begins a 60-day negotiation period. This stripped away the geopolitical risk premium that had been the energy sector's most powerful tailwind for months.

Under its terms, Iran will allow toll-free passage through the Strait of Hormuz immediately, with full traffic capacity restored within 30 days. Roughly 20% of the world's seaborne oil and LNG transits the strait. Saudi tankers and LNG carriers were already departing the Gulf region as shipping activity began to normalize. Oil reached as high as $120 per barrel at the peak of the conflict and fell nearly 29% in a month. That collapse reflects markets pricing in the return of Iranian barrels to global supply, barrels that had been sanctioned out of the market, alongside the reopening of the world's most critical energy shipping lane.

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 Borr Drilling (NYSE: BORR) fell 2.7%. Is now the time to buy Borr Drilling? Access our full analysis report here, it’s free.
• Oilfield Services company Nabors Industries (NYSE: NBR) fell 3.4%. Is now the time to buy Nabors Industries? Access our full analysis report here, it’s free.

Zooming In On Nabors Industries (NBR)

Nabors Industries’s shares are extremely volatile and have had 47 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 2 days ago when the stock dropped 3.7% on the news that oil extended its decline, with Brent crude dropping below $80 per barrel for the first time since March and WTI falling to around $75. 

The proximate cause is unchanged: the Iran peace deal removes the supply disruption that had kept a substantial risk premium embedded in oil prices since the Hormuz blockade began in late February. Brent peaked at $126 during the conflict. At $80, it is still well above the $67 it traded before hostilities began. But the direction of travel is clear, and each session that confirms the peace deal is durable takes another layer off that premium. 

What is new is the certainty around the trajectory. Trump clarified that the Strait of Hormuz will remain toll-free beyond the initial 60-day period, removing a scenario in which tariffs or restrictions might have been reimposed once the ceasefire settled. 

For energy companies, the arithmetic is straightforward. E&P producers built 2026 revenue budgets at elevated oil prices. Every dollar Brent drops from the war-era peak reduces those revenue projections. Oilfield services companies face a compounding effect: lower prices prompt producers to cut drilling capex, which reduces demand for the services they sell.

Nabors Industries is up 54.9% since the beginning of the year, but at $85.84 per share, it is still trading 22.4% below its 52-week high of $110.63 from May 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Nabors Industries’s shares 5 years ago would now be looking at only $739.93.

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