What Happened?
A number of stocks jumped in the pre-market session after crude oil prices jumped following President Donald Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz.
In early Monday trading, Chevron (NYSE: CVX), Exxon Mobil (NYSE: XOM), and the Energy Select Sector SPDR Fund (NYSEARCA:XLE) traded higher in pre-market indications, while refiners Valero Energy (NYSE: VLO), Marathon Petroleum (NYSE: MPC), and Phillips 66 (NYSE: PSX) advanced overnight alongside rising diesel futures. The move followed an CNBC report that President Trump rejected Tehran’s proposal to reopen the waterway within seven days in exchange for lifting a U.S. naval blockade and easing oil sanctions.
International benchmark Brent crude climbed more than 3% to top $107 a barrel, according to Reuters, extending supply concerns across a chokepoint that historically handles a fifth of global petroleum shipments. Sustained crude above $100 expands cash-flow projections for upstream producers, according to Bloomberg, but policy risks complicate the downstream outlook. While drillers benefit directly from higher commodity realizations, refiners face headwinds after Trump said the administration is considering a ban on diesel exports to lower domestic fuel costs, which could force refinery run cuts, according to Reuters.
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:
- U.S. Shale E&P company Crescent Energy (NYSE: CRGY) jumped 2.6%. Is now the time to buy Crescent Energy? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company Kosmos Energy (NYSE: KOS) jumped 2.8%. Is now the time to buy Kosmos Energy? Access our full analysis report here, it’s free.
Zooming In On Kosmos Energy (KOS)
Kosmos Energy’s shares are extremely volatile and have had 80 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock dropped 7.3% on the news that the Federal Reserve's interest-rate decision, pausing a recent rally even as Middle East supply risks remained in focus. Brent crude eased 1.1% to $107.61 a barrel, its first decline of the week, according to the Associated Press.
Reuters reported that oil's retreat and steadier bond yields came as investors waited for the Fed's policy announcement later in the day. The pullback followed a sharp Tuesday rally that had pushed benchmarks near four-month highs, even as traders continued to watch Saudi Arabia's East-West pipeline outage and Red Sea shipping disruptions. Exploration and production shares tend to move with near-term crude prices because those futures feed directly into expected revenue and cash flow, so a pause in the oil rally can trigger a sector-wide reset even when the longer-term supply backdrop is still tight.
Kosmos Energy is up 200% since the beginning of the year, but at $2.68 per share, it is still trading 18.2% below its 52-week high of $3.27 from May 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Kosmos Energy’s shares 5 years ago would now be looking at only $882.84.
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