US Oil Giants Reap Billions as Iran Conflict Drives Fuel Prices Higher
Oil companies Exxon Mobil and Chevron have reaped massive profits as the ongoing conflict between the US and Iran has disrupted oil shipments through the Strait of Hormuz, a narrow waterway that accounts for nearly a fifth of global oil supplies. The price of Brent crude, the international standard, soared from around $70 to above $100 a barrel in March, April, and May.
The conflict began six months ago and has led to significant increases in fuel prices globally, with gasoline, diesel, and jet fuel prices climbing during this period. As a result, supplies ran low in some countries, leading to sporadic fuel rationing in Australia and government office closures in Nepal and Sri Lanka.
According to reports, Exxon Mobil nearly doubled its second-quarter profits to $14.53 billion, up 105% from the same time last year, with revenue increasing by 42%. Chevron also saw a significant increase in profits, quadrupling to $12.07 billion, up 385% from the same quarter last year.
The large oil companies have benefited greatly from this market condition due to their ability to extract and refine oil. 'The return on refining has skyrocketed,' said Tom Seng, assistant professor of energy finance at Texas Christian University. 'Oil right now is priced what it is because of the Iran war.'