5 global oil giants post $48B profit amid US-Iran war
What's the story
Five of the world's largest oil companies, Exxon Mobil, Chevron, BP, Shell and TotalEnergies, have reported a combined profit of $48 billion in the second quarter. The windfall comes as oil prices soared above $100 per barrel amid rising hostilities between the US and Iran. The companies also generated nearly $90 billion in cash during the period, surpassing levels seen after Russia's invasion of Ukraine in 2022.
Criticism
Political backlash over profits
The massive profits have drawn political flak, with US President Donald Trump recently slamming Exxon and Chevron for making "too much money" from higher fuel prices during the Iran war.
Much of this extra cash has been used to build reserves and cut debt.
Cash reserves across these five supermajors increased by over $17 billion from the previous quarter, according to IEEFA's (Institute of Energy Economics and Financial Analysts) Williams-Derry.
Operational focus
Focus on operational performance
During the ongoing Middle East conflict, these oil companies are focusing on what they can control, operational performance, trading, and optimization.
BP CEO Meg O'Neill said her company is focusing on reliability across its upstream assets and refining operations.
Shell CEO Wael Sawan described volatility as "the new normal" and said higher commodity prices have given a strong tailwind to their results.
API's position
API defends industry, opposes windfall tax calls
The American Petroleum Institute, which represents around 600 drilling companies, refiners, and other industry participants, said oil and gas is a cyclical business that should be assessed over decades rather than quarters.
It opposed calls for a windfall tax on excess profits.
The API said the industry was delivering record production and world-leading refining during one of the biggest global energy disruptions in decades while continuing to invest in supply, infrastructure and resilience.
Price forecast
Oil prices could soar in Iran war's wake
The future of oil prices will depend on how long the supply disruption lasts.
JPMorgan estimates that each additional month of disruption could push Brent prices up by $7-8 per barrel.
If the disruption continues for three months, the bank expects average monthly Brent prices to hit around $114 a barrel.
Goldman Sachs has also warned that if shipping disruptions through the Strait of Hormuz continue, Brent could rise to $120 a barrel.