After leading the markets for much of the first half of the year, energy stocks tapered off from mid-May through the start of July as a tenuous agreement between Iran and the United States helped normalize oil prices. But tensions in the Middle East have once again flared up, with the two countries exchanging missile fire and conflicting statements about maritime traffic in the Strait of Hormuz.
On June 17, the countries signed a memorandum of understanding that extended the ceasefire for 60 days while they negotiated a final agreement. The price of Brent crude—the global oil benchmark—had already begun moderating, falling nearly 40% from its year-to-date (YTD) high of $118.35 on March 31 to $71.44 by July 1.
