US-Iran Conflict Drives Up Oil Prices, Boosting Profits for Major Oil Companies
The ongoing US-Iran conflict has driven up oil prices, significantly boosting profits for major oil companies.
The conflict began in February, when the US and Israel launched a war against Iran. This led to disruptions in shipping through the Strait of Hormuz, which handles approximately one-fifth of global oil and liquefied natural gas (LNG) shipments.
As a result, companies like Exxon Mobil and Chevron reported significant profit growth in the second quarter, with their refining segments benefiting substantially from tight refined product supply. According to Tom Seng, Assistant Professor of Energy Finance at Texas Christian University, 'Refining margins, measured by return on investment, have surged.'
Rising prices for products such as diesel and jet fuel have increased Chevron's quarterly refining profits sixfold, even as its crude processing volumes and refined product sales have both declined.
Experts predict that refineries will continue to reap windfall profits due to insufficient supply and elevated oil prices. As Timothy Fitzgerald, Professor of Business Economics at the University of Tennessee, noted, 'For a company with substantial refining capacity, the current situation is highly favorable.'