Oil Slides As Iran War Odds Cool: Exxon, Chevron Face New Reality With WTI Near $62

Polymarket odds for a U.S. strike on Iran cooled sharply over the weekend on fresh diplomacy signals, sending crude prices lower as the market’s “war premium” began to unwind.

Traders on the prediction market now see a 25% chance of a U.S. strike occurring in February, a significant drop from last week’s highs.

The longer-term view remains uncertain but softer, with the odds of a strike by June 30 sitting at 54%.

The Trump administration, previously signaling “maximum pressure,” is now reportedly leveraging back-channel talks via Turkey and Qatar.

Axios reports the White House is “open to negotiations”, while Al Jazeera confirmed today that Tehran “eyes progress” on nuclear talks.

Markets are recalibrating risk based on a harsh geopolitical reality: Tehran is a tougher target than Caracas.

In an interview with TRT World, Trita Parsi of the Quincy Institute noted that “the military operation [in Venezuela] is far less complex than anything that the US would try with Iran,” citing Tehran’s “superior” capability to strike back.

Unlike the fragile state of Venezuela, Iran has a sophisticated proxy network, and a stockpile of ballistic missiles capable of reaching Europe, makes direct conflict a far riskier bet for Trump.

The de-escalation sent oil prices crashing. West Texas Intermediate (WTI) fell to ~$61.80 and Brent Crude dropped to ~$65.90—a decline of roughly 5% from Friday’s settle.

If WTI breaks $60, the “breakeven” for many shale capital return programs is breached.

The sudden drop is battering the energy sector, which had been pricing in a prolonged conflict.

While European majors like BP (NYSE:BP) and Shell (NYSE:SHEL) are already reported to be prepping shareholder payout cuts, American supermajors are now in the crosshairs:

• Exxon Mobil Corp (NYSE:XOM) just reaffirmed a plan to buy back $20 billion in shares through 2026, but with the caveat of “reasonable market conditions.” With crude shedding nearly 5% in 48 hours, those conditions are deteriorating fast.

• Chevron Corp (NYSE:CVX) raised its dividend by 4% last week. A sustained drop below $60/barrel could force management to choose between defending the balance sheet or maintaining aggressive returns to shareholders.

Amid the chaos, some U.S. drillers are choosing consolidation to survive.

In a blockbuster Monday morning announcement, Devon Energy Corp (NYSE:DVN) and Coterra Energy Inc (NYSE:CTRA) agreed to merge in a $58 billion all-stock deal.

The move is a defensive bet that scale—and a dominant position in the Delaware Basin—will protect them from the volatility rocking the global markets.

If peace talks gain traction, the floor for oil could be lower than Wall Street anticipated, putting the sector’s record shareholder returns in serious jeopardy.

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