It's a tough day for S&P/ASX 200 Index (ASX: XJO) oil shares today.
At time of writing, the ASX 200 is up 1.4% while the S&P/ASX 200 Energy Index (ASX: XEJ) is down 2.1%.
Big name players like Santos Ltd (ASX: STO), Woodside Petroleum Limited (ASX: WPL) and Beach Energy Ltd (ASX: BPT) aren't helping out.
Of these 3 ASX 200 oil shares, only Santos is outperforming the Energy Index, with Santos shares down 1.7% at the time of writing.
Meanwhile the Woodside share price is down 4.5%, and Beach Energy shares have tumbled 6.2%.
So, what's going on?
ASX 200 oil shares slide alongside crude prices
At this time yesterday, Brent crude oil was trading for US$130 per barrel, the highest level since 2008.
Energy prices skyrocketed during Russia's initial deployment of forces along the Ukraine border and eventual full-scale invasion of its neighbour.
But overnight some early signs emerged that the conflict might end sooner than many fear. That could avert further humanitarian tragedies alongside quelling investors' angst over limited energy supplies just as the world moves to fully reopen from COVID-19.
At time of writing, Brent crude oil is worth US$111 per barrel, down more than 15% in just over 24 hours, clearly putting pressure on ASX 200 oil shares.
While that's still very pricey by historical standards, investors had been bidding up energy shares over the past month and look to be taking some profits off the table.
Despite today's retrace the Woodside share price, for example, remains up 19.2% since 11 February.
Rival ASX 200 oil share Santos is up 2.7% over the month while Beach Energy shares are still up 5.4%.
What else is putting downward pressure on oil prices?
Word that OPEC might open up the taps wider also hit the markets yesterday.
Yousef al-Otaiba, the UAE's ambassador to the United States said (quoted by Bloomberg), "We favour production increases and will be encouraging OPEC to consider higher production levels."
A number of other OPEC nations were quick to pour cold water on the idea of ramping up output beyond the cartel's current agreement. But the rift within OPEC looks to have helped send crude prices, and ASX 200 oil shares lower.
And yesterday in the United States, Energy Secretary Jennifer Granholm encouraged US producers to up their own production.
"We are on a war footing," she said.
Granholm continued:
We are in an emergency, and we have to responsibly increase short-term supply where we can right now to stabilize the market and to minimize harm to American families… Right now, we need oil and gas production to rise to meet current demand.
If producers outside of Russia do manage to make up for banned Russian oil exports, it could keep a lid on rocketing crude price.
Even so, at today's US$111 per barrel, ASX 200 oil shares are enjoying some comfortable margins.
