$47 Billion Windfall: How Oil Giants Profited from Iran Conflict

Oil giants ExxonMobil, Chevron, Shell, BP, and TotalEnergies raked in nearly $47 billion in net profit during the second quarter of this year. This windfall is largely due to a supply shock caused by the US and Israel's attack on Iran, which led to a significant increase in oil prices.

The price of Brent crude averaged around $69.82 per barrel in January but surged to a high of $126.41 by late April. As a result, these companies saw their profits soar. For instance, ExxonMobil made a net profit of $14.5 billion, more than double its profit from the same quarter last year.

The increase in oil prices can be attributed to two main factors: the damage to Gulf refining and export infrastructure caused by the conflict, which resulted in stranded product cargoes; and the fact that refineries outside the affected region were able to run at full capacity to meet demand.

This means that companies with integrated operations, such as TotalEnergies, were able to capture margins at multiple points in the supply chain. In contrast, those without this integration saw their profits rise but not as sharply.