US-Iran Conflict Fuels Oil Company Profit

Oil Companies Report Increased Second-Quarter Profits as US-Iran Conflict Disrupts Shipments

American oil and gas companies reported higher second-quarter profits in 2026 after the conflict between the United States and Iran restricted petroleum shipments through the Strait of Hormuz. The waterway, which previously handled about one-fifth of global oil and natural gas deliveries, saw most traffic halted for six months. Brent crude prices rose from roughly $70 per barrel to above $90 per barrel during March, April, and May.

The reported earnings drew attention because gasoline, diesel, and jet fuel prices increased during the April-to-June period. Some countries experienced supply shortfalls, including temporary fuel rationing measures in Australia and temporary government office closures in Nepal and Sri Lanka.

Exxon Mobil reported second-quarter net income of $14.53 billion, more than double the $7.09 billion recorded in the same quarter of 2025. Revenue reached $116.02 billion, a 42 percent increase from the prior year. Chevron reported net income of $12.07 billion, compared with $2.49 billion in the year-earlier quarter, with revenue of $70.06 billion, up 56 percent.

Six large European oil companies recorded combined first-quarter profits of $22 billion, 43 percent above the same period in 2025, according to data compiled by Global Witness, a nonprofit organization that examines environmental and resource issues.

Patrick Galey, who leads fossil-fuels work at Global Witness, stated that certain groups benefited from the supply constraints while others faced electricity limits, rationing, and higher fertilizer costs. Energy companies do not directly set benchmark oil prices, which moved between $68 and $115 per barrel during the quarter in response to supply, demand, and trading activity.

In March 2026, Democratic members of Congress introduced legislation that would impose an excise tax on companies producing or importing at least 300,000 barrels of oil per day. The proposed tax would equal 50 percent of the difference between the prevailing price and the 2025 average, with proceeds directed to consumers. Senator Sheldon Whitehouse of Rhode Island, sponsor of the Senate bill, said the measure would address elevated profits without reducing certain domestic programs. A companion measure was introduced by Representative Ro Khanna of California. Similar proposals did not advance in prior years.

The national average retail price for regular gasoline reached $4.11 per gallon by late July 2026, about $1 higher than the level one year earlier. The average stood below $3 per gallon before the United States and Israel conducted strikes on Iranian targets.

Tom Seng, assistant professor of energy finance at Texas Christian University, noted that integrated companies with both upstream production and refining operations were positioned to capture wider margins when product prices rose faster than crude costs. Refinery crack spreads, the difference between crude input costs and finished-product values, reached $50 to $60 per barrel in late July for some facilities, compared with a typical range of $20 to $25.

Timothy Fitzgerald, professor of business economics at the University of Tennessee, observed that refineries with secure crude supplies, including many in the United States, recorded elevated margins on diesel and jet fuel. Diesel prices in the United States averaged 41 percent above pre-blockade levels. Refineries in parts of the Middle East and Russia faced damage or reduced throughput, while some Asian facilities encountered delivery constraints.

Fitzgerald added that higher energy costs ultimately affect end users through direct fuel purchases and through embedded costs in other goods. Companies with production outside the Persian Gulf, such as Exxon Mobil and Chevron, sold output at elevated prices. Producers inside the region that faced export limits or facility damage recorded lower volumes and higher logistics and security expenses.

Because oil is traded on a forward basis, Exxon Mobil and Chevron recorded more limited gains in the first quarter. The second quarter provided the first full period in which higher prices were reflected in reported results. Some European companies with inventories positioned for spot trading captured gains during the March price increase, Seng said.

The conflict began in early 2026. Shipping data showed that tanker transits through the Strait of Hormuz fell sharply after the initial exchanges. Global oil inventories tightened as a result. Brent crude traded near $91 per barrel in late July 2026. American refineries operated near maximum utilization rates, supported by domestic crude availability and reduced competition from damaged overseas capacity.

Legislative proposals for a windfall tax remain pending in both chambers. Industry representatives have stated that tax changes could affect future investment decisions, while supporters argue the measures would offset consumer costs during periods of elevated prices. Market analysts continue to monitor whether additional supply from non-OPEC producers or diplomatic developments will ease the current constraints.