
What happened?
A number of stocks fell in the afternoon session after crude oil prices tumbled as renewed diplomatic talks between the United States and Iran eased concerns over potential Middle East supply disruptions.
Brent crude fell by more than 4%, while broader crude benchmarks dropped 3% following reports that negotiators convened in Doha to develop a framework for an agreement. For energy producers, crude prices directly dictate top-line revenue and operating margins. When geopolitical tensions flare across vital oil-producing regions, markets build in a risk premium, which is an additional cost priced into commodities to compensate for potential disruption risks.
Progress in diplomatic dialogue deflates this geopolitical risk premium, pushing oil prices lower. As the threat of imminent disruption to global supply routes recedes, investors quickly recalibrate expected cash flows for exploration and production firms, leading to widespread declines across the energy industry.
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 Helmerich & Payne (NYSE: HP) fell 5.7%. Is now the time to buy Helmerich & Payne? Access our full analysis report here, it’s free.
- Infrastructure company DHT Holdings (NYSE: DHT) fell 4%. Is now the time to buy DHT Holdings? Access our full analysis report here, it’s free.
- Mixed or offshore upstream E&P company Vitesse Energy (NYSE: VTS) fell 3.6%. Is now the time to buy Vitesse Energy? Access our full analysis report here, it’s free.
- U.S. shale E&P company HighPeak Energy (NASDAQ: HPK) fell 12.4%. Is now the time to buy HighPeak Energy? Access our full analysis report here, it’s free.
- Oilfield services company Borr Drilling (NYSE: BORR) fell 5.1%. Is now the time to buy Borr Drilling? Access our full analysis report here, it’s free.
Zooming in on HighPeak Energy (HPK)
HighPeak Energy’s shares are extremely volatile and have had 73 moves greater than 5% over the last year. But moves this big are rare even for HighPeak Energy and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 10.9% on the news that the company reported mixed first-quarter 2026 results that left investors wanting more. While the company surpassed Wall Street's expectations for both revenue and adjusted EBITDA (a measure of profitability), other key metrics raised concerns. Revenue declined by 16.1% year-over-year to $215.9 million, and its operating margin was nearly cut in half compared to the same period last year, falling from 35.1% to 16.7%.
Furthermore, HighPeak continued to burn cash, reporting a negative free cash flow of approximately $24.6 million for the quarter. Despite beating headline estimates, the year-over-year revenue drop and ongoing cash consumption appeared to outweigh the positives for investors.
HighPeak Energy is up 100% since the beginning of the year, but at $8.96 per share, it is still trading 22.6% below its 52-week high of $11.57 from October 2026. Despite the year-to-date gain, investors who bought $1,000 worth of HighPeak Energy’s shares 5 years ago would now be looking at only $593.05.
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