American oil and gas giants reported massive spring profits as a six-month conflict between the U.S. and Iran impeded petroleum shipments, according to reports from the Associated Press and PBS. The fighting halted most shipping through the Strait of Hormuz, a waterway that previously served as a delivery route for a fifth of the world’s natural gas and oil.
The supply constraints caused Brent crude prices to soar from approximately $70 to over $100 a barrel for much of May, April, and March, peaking at $126. Meanwhile, the price of American oil ricocheted from $68 to $115 a barrel during the quarter.
Corporate Earnings and Market Impact
Exxon Mobil reported that its second-quarter profits doubled to $14.53 billion, with revenue increasing 42% to $116.02 billion, boosted by record diesel production. Tom Seng, an assistant professor of energy finance at Texas Christian University, noted that companies like Exxon and Chevron are best positioned to profit from these conditions because they also own refineries. Seng stated that Chevron’s quarterly refinery profit was six times larger in 2026, despite selling fewer products and processing less crude.
The surge in energy costs impacted consumers globally. In the U.S., the average price for a gallon of regular gasoline reached $4.11 on Friday, which is about $1 more than the same time last year. Other global impacts included government office closures in Sri Lanka and Nepal, as well as sporadic fuel rationing in Australia.
Legislative Response
In response to these “war windfalls,” Democrats in Congress introduced bills in March to tax major oil producers on profits shown from 2026 onward, with the intent to redistribute proceeds to consumers.
Exxon CEO Darren Woods criticized such measures during a Friday call with investors, calling the penalization of businesses that provided product very short-sighted.
Woods added that the company canceled planned investments in Europe following the previous implementation of a windfall profits tax.
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