The war in Iran has triggered a historic oil shock, sending crude prices sharply higher and generating substantial profits for Big Oil. Since the Middle East conflict began on February 28, Tehran’s effective closure of the Strait of Hormuz has contributed to a surge of more than 50% in global oil prices. Major oil companies have generally recorded exceptional earnings. With inventories at historic lows, oil prices are expected to remain elevated in the coming months.
The US and Israeli war against Iran has developed into a prolonged, low-intensity regional conflict. Attacks on energy infrastructure, refineries and shipping routes have significantly disrupted global energy markets, increasing the geopolitical risk premium embedded in crude oil prices. That premium could persist even after hostilities end.
“Given recent developments in the Middle East, the relentless rise in fossil fuel prices and the significant increase in the cost of living, we need to mitigate the negative consequences for citizens and tax energy companies to compensate households for their losses,” said Irish Minister of State for European Affairs Thomas Byrne, speaking at a plenary session in Strasbourg on behalf of the EU Presidency.
According to ANSA, Byrne made the remarks during discussions on a potential windfall profits tax on energy companies.
“We need to introduce containment measures, such as compensation and emergency mechanisms, and we know that taxing windfall profits is a necessary measure,” he added.
How much are the world’s largest oil companies earning from the surge in crude prices?
According to estimates from RBC Capital Markets, the combined profits of the five largest Western oil companies, BP, Chevron, Exxon Mobil, Shell and TotalEnergies, are expected to reach approximately $53 billion in the third quarter of 2026.
That would exceed the $48 billion recorded in the second quarter and represent roughly twice the earnings reported during the same period in 2025, according to Reuters.
British oil major BP more than doubled its profits in the first three months of 2026 compared with the corresponding period a year earlier. Paris-based TotalEnergies reported an increase of nearly 30% over the same period.
Shell expects its refining margins to reach $42 per barrel in the third quarter of 2026, an all-time high and a substantial increase from the $24 per barrel recorded in the previous quarter.
As Reuters noted, Shell’s refining margins stood at just $12 per barrel a year earlier.
The company’s gas and oil products businesses are expected to deliver results broadly in line with the previous quarter, when Shell reported its second-highest quarterly profit on record.
Despite the broader increase in Big Oil profits, not every major oil producer has benefited equally from rising crude prices.
Chevron’s profits reportedly declined by approximately one-third in the first three months of 2026 compared with the same period a year earlier, while Exxon’s earnings fell by 45% over the same timeframe.
As analysts explained to ABC News, some companies suffered significant financial losses because of hedging strategies originally designed to protect them against falling oil prices.
When crude prices rose unexpectedly, these financial arrangements generated losses.
Hedging is intended to make future revenues more stable and predictable by reducing exposure to fluctuations in commodity prices.
For example, if crude oil rises to $100 per barrel, a company may sell its physical oil at the higher market price but still be required to pay the difference when settling a hedging position tied to a previously agreed price.
As a result, the gains from selling crude at higher prices can be partially offset by losses on financial contracts.
Nevertheless, despite the financial impact of these hedging arrangements on individual producers, higher global oil prices have generally benefited the major oil companies.
The sharp increase in crude prices following the outbreak of the Middle East conflict has therefore translated into significant earnings for much of the industry, even as individual companies have experienced markedly different financial outcomes.