European oil shares fall amid US-Iran peace deal

European oil companies’ shares declined following the agreement reached between the US and Iran in a 14-point draft agreement.

Iranian reports say the parties agree to a permanent ceasefire on all fronts, including Lebanon, while included in the plan is reportedly Washington’s commitment not to interfere in Tehran’s domestic affairs and the lifting of the American naval blockade against Iran.

The deal also involves the reopening of the Strait of Hormuz within 30 days under Iran’s regulations, as well as the lifting of sanctions on Iranian oil and energy products.

Brent crude oil dropped 5% following these developments, and while markets traded positive due to the agreement, oil companies’ shares suffered as investors expected that the profit growth of the war period would eventually end.

TotalEnergies and Shell shares fell 4.8% and 4.7%, respectively, at 1200GMT.

Italian Eni shares declined 4.3%, UK-based BP lost 3.6%, and shares of Greek Motor Oil Hellas fell 3.9%.

Trade flows in the Strait of Hormuz are estimated to take months to return to normal, while a recovery in supply is expected to take a long time.

*Writing by Emir Yildirim in Istanbul