The energy trade that paid off all spring has reversed in full. The two largest oil-and-gas equity funds have erased their entire Iran war rally, and the sector's spring darlings are now its biggest losers.
The Energy Select Sector SPDR Fund (XLE), the broad sector benchmark, fell to $53.84 on Thursday, below its level when the fighting began in late February.
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which tracks the drillers, has round-tripped to about $154, back to its pre-spike level.
Both topped out in early April, near the peak of the war, and have since given back their gains.
Chart: XLE ETF Has Now Fully Erased Its Iran-War Rally
The Biggest Iran Winners Became The Biggest Losers
The damage is concentrated in the names that ran hardest.
Since their March 30 highs, the steepest energy losers are the gas-heavy and oil-leveraged producers, according to market data.
Comstock Resources Inc. (CRK), a Haynesville gas driller, has fallen nearly 40%.
Northern Oil & Gas Inc. (NOG) has dropped more than 35%, and liquefied natural gas exporter Venture Global Inc. (VG) nearly as much.
Coal producer Peabody Energy Corp. (BTU) has lost 28%, PBF Energy Inc. (PBF) has fallen nearly 25%, together with Gulfport Energy Corp. (GPOR) and Texas Pacific Land Corp. (TPL).
Antero Resources Corp. (AR), APA Corp. (APA) and Matador Resources Co. (MTDR) have each shed more than 22%.
These were the leveraged way to play a closed Strait of Hormuz. With the Strait reopening, that leverage is working in reverse.
The Technical Read: Crude Is Oversold
Adam Turnquist, chief technical strategist at LPL Financial, sees crude near a decision point.
WTI has fallen nearly 40% from its April highs and is retesting support at its rising 200-day moving average, with the Relative Strength Index — a momentum gauge — hitting oversold levels for the first time since April 2025.
“A short-term relief rally would not be surprising,” he wrote.
Jacob Funk Kirkegaard of 22V Research described the Versailles memorandum signed by President Donald Trump and Iran as a limited, interim arrangement that mostly confirms what the market already knew, but one whose move toward normalization will be hard to reverse.
He expects no lasting toll on the waterway. “The threshold for once again closing the Strait of Hormuz will be high,” he wrote in a note.
There is a cross-current. The same G7 meeting hardened the West's line on Russia, with leaders agreeing to tighten sanctions on Russian oil and gas — a step that could pull some barrels back off the market even as Gulf supply returns.
For now, energy equities have surrendered four months of war gains, oil keeps falling, and the only near-term case for higher prices is that crude has fallen too far, too fast.
Photo: FOTOGRIN on Shutterstock.com
