Despite reporting better-than-expected financial results for the first quarter, shares of the Norwegian energy major Equinor fell sharply. The decline was driven by a drop in oil prices following optimistic market sentiment that the Middle East conflict may be nearing a resolution.
During European afternoon trading, Equinor's stock plunged 8.5% to 350.70 Norwegian kroner, significantly underperforming other European energy companies. The sell-off coincided with a sharp decline in crude oil benchmarks. Brent crude fell 5.6% to $103.74 per barrel, while West Texas Intermediate (WTI) dropped 5.5% to $96.59 per barrel.
The drop in oil prices occurred after the U.S. President indicated that military action against Iran could end if Iran agrees to existing negotiation terms. Earlier, media reports citing anonymous sources suggested the U.S. was close to a one-page memorandum of understanding with Iran, including plans to gradually reopen the Strait of Hormuz.
Equinor's first-quarter adjusted operating profit rose 13% year-over-year to $9.77 billion, supported by record production levels and higher oil prices. This result exceeded the analyst consensus estimate of $9 billion. Adjusted net profit more than doubled, reaching $3.695 billion.
The company's total oil and gas production increased by 9% compared to the same period last year, reaching a record 2.313 million barrels of oil equivalent per day. This production surge coincided with a period of rising international crude prices.
Additionally, Equinor announced the launch of its second share repurchase program for 2026, planning to buy back up to $375 million in shares by the end of July. The company's total share repurchase plan for the year remains capped at $1.5 billion.
Since the onset of the Middle East conflict, Equinor's stock performance has outpaced some of its European peers. While the company has no direct operational exposure in the Middle East, it has benefited from rising commodity prices caused by supply disruptions in the region. Despite the recent decline, Equinor's stock remains up nearly 50% for the year.
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