Oil Companies Reap Uneven Rewards from Iran War-Driven Price Spike

The Iran war has led to a historic oil shock, causing petroleum prices to soar by over 50%. Despite this, not all oil companies are profiting equally. BP and TotalEnergies reported significant increases in profits, with BP more than doubling its earnings over the first three months of 2026 compared to the same period last year. However, Chevron saw its profits fall by over a third, while Exxon's plunged by 45%.

According to Timothy Fitzgerald, a University of Tennessee professor of business economics, the disparities in performance are due to each company's ability to take advantage of the price spike without being disrupted by costly delivery shortfalls. Some firms suffered losses from financial hedges meant to protect against price drops, which ultimately turned out to be unprofitable.

Exxon, for example, temporarily lost billions in earnings due to 'timing effects' tied to these financial hedges. The company's CEO, Darren Woods, stated that the firm is a 'fundamentally stronger company than it was just a few years ago,' but admitted that 15% of its production has been impacted by the Iran war.

Tom Seng, a professor of energy finance at Texas Christian University, explained that if you can't deliver oil due to disruptions, you won't be able to take advantage of higher prices. This is precisely what happened to Exxon, which will eventually earn billions in earnings from unsold oil when the Strait of Hormuz reopens.