The S&P 500 energy index (.SPNY) falls 1.5% as oil prices tumble.
Brent crude futures (LCOc1) falls 6.9% to $90.03/barrel; U.S. West Texas Intermediate (CLc1) down 6.4% at $83.51/barrel.
Prices hovered around a one-week low after the U.S. and Iran paused strikes over the weekend, raising hopes of a diplomatic solution that could de-escalate the conflict and allow shipping to resume through the Strait of Hormuz.
"There has been no increase in shipping traffic through the Strait of Hormuz, and as such we see this showing the selloff in crude remains overdone as a return to 'normalisation' continues to look remote in near term," Panmure Liberum analyst Ashley Kelty says.
Oil and gas companies among the top decliners
ONEOK (OKE.N), Kinder Morgan (KMI.N), Williams Companies (WMB.N) and Targa Resources (TRGP.N) fall between 2.4% and 2.9%, among the top percentage losers on the energy index.
Energy majors Exxon Mobil (XOM.N) and Chevron (CVX.N) down 1.4% and 1.7%, respectively.
Oil producers Occidental Petroleum (OXY.N), Devon Energy (DVN.N), APA Corp (APA.O) and Diamondback Energy (FANG.O) decline between 1.9% and 2.4%.
Refiners Marathon Petroleum (MPC.N) and Valero Energy (VLO.N) each down marginally.
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