Big Oil Profits Surge Amid Iran Conflict, Consumers Face High Gas Prices
Major US oil and gas companies have reported over $130 billion in profits in the six months since the Iran war began, as soaring fuel prices impact consumers.
More than 50 major U.S. oil and gas companies have collectively earned over $130 billion in profits between April and September, a period marked by a significant increase in gasoline and diesel prices that is straining consumers. This profit figure is nearly triple the $47 billion recorded during the same six-month period last year, according to a New York Times analysis.
The conflict, which commenced on February 28, has disrupted oil shipments through the Strait of Hormuz, a crucial artery for global oil transport that previously accounted for approximately one-fifth of global oil consumption. While oil shipments through the Persian Gulf have reportedly surpassed pre-war levels, these gains have not yet translated to lower prices at the pump.
Several major companies reported substantial earnings. ExxonMobil’s refining business achieved a record $9.05 billion in third-quarter profits, almost five times its earnings from the previous year. Chevron's refining, fuel marketing, and related operations brought in $4.93 billion for the third quarter, about four times its profit a year earlier and a quarterly record for the division. Collectively, ExxonMobil, Chevron, BP, Shell, and TotalEnergies posted $56.3 billion in adjusted third-quarter net income, with each company exceeding Wall Street's expectations.
Since the conflict in Iran began, international oil prices have risen by nearly 60%. Refineries have seen increased margins as the war in Iran and Ukrainian strikes on Russian refineries have reduced global fuel-making capacity by approximately 10%, according to Bloomberg.
American motorists are currently paying an average of $4.20 per gallon for regular gasoline, a notable increase from $2.98 before the Iran war. Diesel prices have also surged, climbing from $3.68 to $6.32 per gallon over the same timeframe. Experts suggest that diesel prices may remain elevated due to long-standing constraints on U.S. refining capacity and the difficulties in expanding production.
President Trump has previously expressed frustration with the high fuel prices, urging oil companies to lower retail costs. In August, he singled out ExxonMobil and Chevron, calling for them to return some profits to the public and reduce prices. "When you look at one company where they made 12 times what they made the year before, they ought to give some of that back to the public," Trump stated at the time. He described himself as a proponent of free enterprise but voiced discontent that the industry's gains came at the expense of consumers.
More recently, the President's tone appeared to shift as he acknowledged the industry's substantial financial gains. White House Press Secretary Taylor Rogers stated that the President's primary focus is lowering gas prices and that he has a history of driving them down. Rogers added that once the conflict with Iran concludes, gas prices are expected to decrease significantly. She also highlighted the administration's role in achieving "American energy dominance," positioning the United States as the leading global producer and exporter of oil and natural gas.
Shares for both ExxonMobil and Chevron have seen considerable growth this year, with both stocks climbing following their strong quarterly earnings reports. ExxonMobil shares are up approximately 52% year-to-date, while Chevron stock has also risen by roughly 52%.
BP, in its third-quarter earnings call, noted that its refineries were operating near capacity to offset fuel shortages. The company's CEO cited BP's ability to connect oil and gas production with consumers as a strength during the supply disruptions.