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NEW YORK -- American oil and gas giants raked in massive spring profits while fighting between Iran and the U.S. impeded petroleum shipments and consumers around the world paid more for fuel and confronted shortages.
The conflict, now in its sixth month, halted most shipping through the Strait of Hormuz, a narrow waterway that previously served as a delivery route for a fifth of the world's oil and natural gas. With global supplies constrained, prices for Brent crude, the international standard, soared from about $70 to above $100 a barrel for much of March, April and May, and at one point reached $126.
The money that oil companies accrued between the beginning of April and the end of June could receive extra scrutiny this year. Gasoline, diesel and jet fuel prices climbed sharply during that period, increasing costs for drivers and airline passengers. Supplies ran low in some countries, leading to sporadic fuel rationing in Australia and government office closures in Nepal and Sri Lanka.
Exxon Mobil on Friday reported that its second quarter profits doubled to $14.53 billion, boosted by record diesel production. The oil giant, based in Spring, Texas, brought in $116.02 billion in revenue, up 42%.
Chevron, based in Houston, nearly quadrupled its profits to $12.07 billion and revenue jumped 56% to $70.06 billion.
Six of Europe's largest oil companies posted combined first-quarter profits of $22 billion, more than 40% higher than last year.
"There are constituencies around the world who are having a very good crisis, and the oil producers are one of them," said Patrick Galey, fossil fuels lead at Global Witness, a nonprofit organization that investigates environmental issues. "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."
OIL COMPANY TAXES?
Energy companies such as Exxon and Chevron do not set the price of American oil, which ricocheted from $68 to $115 a barrel during the quarter. It's driven by supply and demand, and what traders, refiners and other buyers are willing to pay.
Nevertheless, Democrats in Congress introduced bills in March to tax major oil producers for profits they show from 2026 onward and have the tax proceeds redistributed to consumers.
"It's fair to put a windfall profits tax on inordinate windfall profits rather than cut off children's food programs," Sen. Sheldon Whitehouse, a Rhode Island Democrat who introduced the Senate version of the legislation.
Whitehouse's measure and a companion bill introduced by U.S. Rep. Ro Khanna of California would amend the U.S. tax code to impose a per-barrel tax on companies that produced or imported at least 300,000 barrels of oil per day in 2025.
"We cracked $4 again per gallon last weekend in gas stations that I drove by, and that's a big expense, particularly for families that get their income from driving around from job to job in the work van or the work truck," Whitehouse said.
The average price for a gallon of regular gasoline in the U.S., which was below $3 before the U.S. and Israel launched attacks on Iran, reached $4.11 Friday, about $1 more than ast year at this time.
The United Kingdom and other European countries implemented temporary windfall profits taxes on fossil fuel companies in 2022. The UK extended that to 2030.
"Penalizing the businesses who stood by those countries and provided that product going forward is very short-sighted," Exxon CEO Darren Woods said in a call with investors Friday. "We canceled investments that we had planned for Europe based on the last time they passed a windfall profits tax."
Outfits such as Exxon and Chevron, which also own refineries, are in the best position to profit from the current market conditions, said Tom Seng, assistant professor of energy finance at Texas Christian University.