US-Iran Conflict Drives Energy Prices Higher, Fuels Massive Oil Profits

The ongoing conflict between the US and Iran has driven up energy prices, resulting in massive profits for major oil companies. The war in the Strait of Hormuz has halted most shipping through the narrow waterway, which previously served as a delivery route for about one-fifth of the world's oil and natural gas.

The conflict has led to a significant increase in Brent crude prices, soaring from around $70 to above $100 per barrel. Exxon Mobil reported doubling its second-quarter profits to $14.53 billion, up 105% from the same time last year. Chevron nearly quadrupled its profits to $12.07 billion, up 385%.

The increase in oil prices has also led to higher fuel costs for consumers. The average price of a gallon of regular gasoline in the US reached $4.11 on Friday, about $1 more than last year. Refineries are enjoying historically high 'crack spreads', which describe the profits refineries make based on the prices of oil and products such as gasoline and jet fuel.

Congress has proposed taxing major oil producers for their war windfalls. The tax would be 50% of the difference between the oil price at the time of the levy and the average price per barrel last year.