Oil Majors See Record Profits as Iran-U.S. Conflict Tightens Global Fuel Supply

U.S. and Israeli attacks on Iran have halted most shipping through the Strait of Hormuz, which moved roughly one-fifth of the world’s oil and gas cargoes. With the route disrupted, Brent crude rose from about $70 to consistently above $100 per barrel in March-May, briefly hitting $126. U.S. gasoline prices followed, with regular-grade averaging $4.11 per gallon—about $1 higher than a year earlier.

Philadelphia Inquirer

Integrated U.S. oil companies have captured the price differentials. Exxon Mobil posted Q2 profit of $14.53 billion, a 105 % increase year-over-year, and revenue of $116.02 billion, up 42 %. Chevron’s profit nearly quadrupled to $12.07 billion, a 385 % jump, with revenue climbing 56 % to $70.06 billion. Refining margins have expanded sharply; jet fuel and diesel are about 41 % higher in the United States, and “crack spreads” are several times historic levels as U.S. refineries run near full capacity while many Middle-Eastern and Russian plants remain offline.

Philadelphia Inquirer

Senate Democrat Sheldon Whitehouse (R.I.) and Rep. Ro Khanna (Calif.) introduced legislation in March to levy a per-barrel excise tax on firms producing or importing at least 300,000 barrels per day in 2025. The tax would capture 50 % of the price difference between the market rate at the time of the levy and the prior-year average, with proceeds earmarked for consumer relief. Exxon Mobil CEO Darren Woods warned the tax would be “short-sighted” and could force cancellation of planned European investments.

Philadelphia Inquirer

Energy-finance scholar Tom Seng (TCU) noted refineries are “making money hand over fist” by converting high-priced crude into more valuable products. Business-economics professor Timothy Fitzgerald (UT) added that firms with extensive refinery capacity are “in a good position,” but warned that “ultimately, users of the energy services pay.”

Associated Press

• “We cracked $4 again per gallon last weekend in gas stations that I drove by, and that’s a big expense, particularly for families that get their income from driving around from job to job in the work van or the work truck,” — Sen. Sheldon Whitehouse

Associated Press

• “The return on refining, on a percentage basis, has skyrocketed,” — Tom Seng, assistant professor of energy finance at Texas Christian University

Associated Press

• “Penalizing the businesses who stood by those countries and provided that product going forward is very short-sighted,” — Exxon CEO Darren Woods

Associated Press