Oil giants post record profits as gas prices soar amid Iran conflict

The conflict, which began on February 28th, initially disrupted oil shipments through the Strait of Hormuz, a vital waterway for global oil trade. While shipments have since rebounded to pre-war levels, according to the Wall Street Journal, pump prices have remained elevated.

ExxonMobil, Chevron, BP, Shell, and TotalEnergies together reported adjusted third-quarter net income of $56.3 billion, exceeding Wall Street expectations, Bloomberg reported. ExxonMobil’s refining business achieved a record $9.05 billion in third-quarter profits, while Chevron’s refining, fuel marketing, and related operations generated $4.93 billion, also a record high.

International oil prices have risen approximately 60% since the US and Israel launched strikes against Iran on February 28th, Bloomberg reported. Refineries have benefited from increased margins due to the Iran conflict and Ukrainian strikes on Russian oil refineries, which have reduced global fuel-making capacity by roughly 10%.

American motorists are currently paying an average of $4.20 per gallon for regular gasoline, a significant increase from the $2.98 average prior to the Iran conflict in late February. Diesel prices have surged even more dramatically, from $3.68 to $6.32 per gallon, representing a $2.64 increase.

Derek Reisfield, co-founder of MarketWatch, cautioned that diesel prices may remain high due to ongoing limitations in US refining capacity. “There is no short-term fix. This problem has been brewing for a long time,” he stated.

Reisfield also warned that sustained high oil prices could incentivize investment in alternative energy sources, potentially diminishing long-term demand for oil.

In August, former President Trump publicly urged ExxonMobil and Chevron to return profits to consumers and lower retail fuel prices, stating, “When you look at one company where they made 12 times what they made the year before, they ought to give some of that back to the public.”

However, last weekend, Trump celebrated the industry’s booming profits at a rally in Georgia.

White House spokeswoman Taylor Rogers stated that the President’s priority is lowering gas prices, adding, “Once the conflict with Iran comes to an end, gas prices will plummet.”

Shares of ExxonMobil and Chevron have risen roughly 52% this year. ExxonMobil closed Friday at $185.58, and Chevron at $235.74.

BP CEO Meg O’Neill, in a statement to investors, highlighted the company’s efforts to maintain energy flow, citing refinery operations near capacity and the release of strategic reserves.