NEW YORK, July 28, 2026, 09:59 EDT — U.S. cash markets opened Tuesday with a notable divergence between crude oil and energy equities. While oil prices continued their downward slide for a third consecutive session, shares of major energy companies showed remarkable resilience, suggesting that equity investors are betting on sustained profitability despite the recent drop in crude.
Brent crude hovered near $86.65 per barrel, down 1.9%, while West Texas Intermediate fell 1.5% to $81.36. The declines have narrowed roughly 60% of the gap between Friday's Brent settlement and Goldman Sachs' projected price of $80 by year-end, assuming a full reopening of the Strait of Hormuz in the fourth quarter. However, the market is not fully pricing in a return to normal supply levels.
Energy stocks defied the oil slump. Exxon Mobil Corp. (NYSE: XOM) edged up 0.4% at the open, while Chevron Corp. (NYSE: CVX) advanced 0.8%. The Energy Select Sector SPDR Fund (NYSEARCA: XLE) also rose 0.3%. This divergence is striking: crude has dropped between six and ten times more than these leading companies since Friday, indicating that equity investors expect earnings to remain protected and are not factoring in a complete cash-flow adjustment.
The physical supply side tells a different story. Persian Gulf oil exports remain at just 41% of pre-war levels, and Red Sea deliveries have fallen by over 3 million barrels per day last week. Saudi Aramco (TADAWUL: 2222) was forced to close its Jazan refinery, which processes 400,000 barrels per day, following an attack. Ship movements through the Strait of Hormuz stayed limited, though activity near Bab el-Mandeb saw a slight uptick.
Giovanni Staunovo at UBS Group AG (NYSE: UBS) noted that the market “hopes the situation improves.” Oman is reportedly in talks with Iran about establishing a management system for the Strait of Hormuz, which would include voluntary transit fees and involvement from Gulf states, according to Reuters. However, significant supply risk persists, and a ceasefire failure could quickly restore oil's war premium.
Energy stocks also helped offset weakness in the technology sector. The SPDR S&P 500 ETF Trust (NYSEARCA: SPY) fell 0.3%, while the Invesco QQQ Trust (NASDAQ: QQQ) dropped 1.6% and Nvidia Corp. (NASDAQ: NVDA) slipped 1.3%. Integrated producers like TotalEnergies SE (NYSE: TTE) benefit from downstream insulation; the company posted a 362% increase in refining and chemicals profit, with that segment generating $1.8 billion in the second quarter. Chief Executive Patrick Pouyanne stated that sporadic access to Hormuz may represent “the new normal,” according to Reuters.
Outlook and Risks
Looking ahead, investors face a range of scenarios. If the ceasefire fails, oil's war premium could quickly return, and additional Red Sea interruptions risk driving prices above $100. On the other hand, a sustained reopening of Hormuz would weigh on upstream profits and support Goldman's $80 Brent outlook. Markets have yet to factor in a return to regular supply levels, and energy stocks currently reflect a lull that has yet to be matched by a rebound in physical flows.
Investors are advised to monitor tanker movements and refinery shutdowns, rather than focusing solely on diplomatic rhetoric. The divergence between crude and equities suggests that while oil prices are reacting to near-term optimism, equity markets are taking a longer-term view, betting that earnings will hold up even if supply normalizes.
