Why ConocoPhillips Stock Dropped Today

Oil prices tumbled in Tuesday trading, with Brent crude futures falling 3% and WTI down 3.5% as of 3:15 p.m. ET -- and both flavors of oil suffered even bigger losses earlier in the day.

Curiously, ConocoPhillips (NYSE: COP) stock didn't. This oil major started the day off with only about a 2% decline, and remains down about 2.2%. Why?

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Is the Strait of Hormuz leaking oil?

In an interview with CNBC this morning, U.S. Energy Secretary Chris Wright asserted that despite what you might have heard, oil shipments through the Strait of Hormuz are "rising very meaningfully" as U.S. Navy vessels coordinate with commercial captains to move their tankers safely through the contested waters. This goes against the accepted wisdom, but according to one recent JPMorgan report, oil shipments through the Strait may now be reaching 2 million barrels per day -- still a fraction of pre-war traffic, but significantly more than many investors were aware of.

And if these reports are true, it would imply that global oil supplies may not be as tight as we thought -- causing investors to worry about the durability of Conoco's profits.

What it might mean for ConocoPhillips

But are the reports true? And even if they are, will they stay true long enough to slake pent-up oil demand and allow prices to fall significantly? I have my doubts.

Continued tensions -- and missile fire! -- continue between Israel and Iran, and between U.S. naval forces and Iran as well. Repeated assurances from the President that a "deal" with Iran is just days away have issued then disappointed for weeks. On top of all this, there's the damage already done to oil infrastructure in Gulf oil states, which will take years to repair.

Seems to me, oil prices could stay high at least that long.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.