Oil Companies See Record Profits In Q2. Exxon Mobil And Chevron Are Among Those Benefiting From Iran War

U.S. oil and gas companies have seen profits soar in the second quarter, largely a result of disruptions related to the Iran war.

Exxon Mobil saw its second-quarter profits jump 105 percent to $14.53 billion, the Associated Press reported. Total revenue for the company rose 42 percent to $116.02 billion.

The war, which began at the end of February, has caused a spike in the price of oil. Brent crude rose from around $70 a barrel at the start of the war to around $100 a barrel for much of the spring. Its high point was $126 a barrel. Prices have been hovering between $80 and $90 a barrel over the past days.

The rise has been driven by regular missile and drone attacks on oil and gas infrastructure throughout the Middle East, as well as the disruption of supply chains. Most notably, Iran has effectively shut down the Strait of Hormuz, through which 20 percent of the world’s oil travels.

For consumers, the war has resulted in higher gas prices and inflation. AAA reported that the average gallon of gas was $4.10. That’s down from the yearly high of $4.56 in May, but still up significantly over last year when the average was $3.14.

The higher gas prices have helped fuel a surge inflation. The inflation rate hit a high of 4.2 percent in May before somewhat cooling in June to 3.5 percent amidst attempts at a ceasefire. Although the war has resulted in higher prices for average Americans, for large oil companies it has meant huge profits.

Houston-based Chevron, for instance, saw its profits skyrocket by almost 400 percent to just over $12 billion. “We’re kind of firing on all cylinders, which is good, because the world needs it,” Chevron CEO Mike Wirth told CNBC.

“There are constituencies around the world who are having a very good crisis, and the oil producers are one of them,” Patrick Galey, fossil fuels lead at Global Witness told the AP. “When you compare that to the hundreds of millions of people who are struggling with rolling blackouts, with electricity curbs, rationing, waiting in line for food queues, or the disruption to fertilizers and the potential impact that that has on food prices, we don’t think that it’s a justifiable price for the rest of the world to be paying.”

The AP noted that U.S. companies don’t set the price of a barrel of oil; the market does. Still, some U.S. lawmakers want to take action and ensure the companies are appropriately taxed on their newfound profits.