Asian Energy Stocks Slide as Iran-Oman Hormuz Talks Pressure Oil Prices

Asian oil and gas stocks fell sharply on Wednesday as crude prices extended their decline, with renewed Iran-Oman talks raising hopes that shipping through the Strait of Hormuz could eventually resume.

Brent crude futures dropped 2.5% to $86.41 a barrel by 01:40 GMT, while U.S. West Texas Intermediate (WTI) crude futures declined 2.4% to around $80.42. Both benchmarks extended losses from the previous trading session as investors reassessed geopolitical risks to global energy supplies.

Iran and Oman have resumed discussions over an interim framework for managing shipping through the Strait of Hormuz. The proposed measures reportedly include establishing a temporary navigation corridor and cooperating on mine-clearing operations.

The diplomatic effort comes while negotiations between Iran and the United States remain stalled and Washington steps up economic pressure on Tehran. Before the conflict, the Strait of Hormuz carried roughly one-fifth of global oil and liquefied natural gas shipments, making developments surrounding the waterway a major driver of crude oil prices.

Expectations of a potential reopening pushed oil prices lower and triggered widespread selling in Asian energy stocks.

In Australia, Woodside Energy shares sank more than 4%, while Santos declined nearly 2%. The S&P/ASX 200 Energy sub-index dropped 2.5%, marking its steepest intraday decline in about a month.

South Korean energy companies suffered even heavier losses. SK Innovation plunged more than 16%, while S-Oil Corp shares fell 7%.

Japanese oil producers also moved lower, with Eneos Holdings and Japan Petroleum Exploration each losing around 2%.

Wednesday's declines followed a 3.1% drop in WTI crude on Tuesday. Traders increasingly focused on the possibility of diplomatic progress around the Strait of Hormuz, with hopes of improved shipping conditions outweighing lingering concerns about supply disruptions and broader tensions involving Iran.