US-Iran Tensions Unwind: Energy Shares Plummet

The recent escalation of US-Iran tensions has led to a sharp reversal in energy shares, with Australian oil and coal producers experiencing a significant pullback. Woodside Energy's share price fell 2.93% to A$31.42 on Monday, while Santos declined 3.64% to A$7.68 as crude oil prices tumbled in response to the de-escalation.

The decline came as West Texas Intermediate crude plummeted 6% to settle below $84 per barrel, Brent crude shed 6.5% to $90.50, and natural gas prices retreated 3.8%. Despite Monday's selloff, the four Australian energy majors remain substantial outperformers year-to-date.

The gains reflect a sustained rally driven by geopolitical tensions that had threatened critical energy chokepoints and pushed risk premiums to multi-year highs. However, bulls argue that structural tightness in oil, gas, and coal markets will reassert itself once the immediate diplomatic headlines fade.