Major oil companies, including ExxonMobil and Chevron, are poised to announce substantial profits for the second quarter of 2026, largely attributed to heightened oil prices resulting from the US-Iran conflict. ExxonMobil is projected to report $14.9 billion in quarterly profits, more than doubling its profit from the same period last year. Chevron is forecast to reap $11.1 billion, a more than four-fold increase from its 2025 level. These figures highlight the significant financial benefits reaped by the industry amidst geopolitical instability.
The conflict, particularly the effective closure of the Strait of Hormuz, has created an unprecedented supply shock, pushing crude oil prices from $68 to $115 a barrel during the quarter. This has led to exceptionally high "crack spreads," which are the profit margins for refineries. Refineries buying a barrel of oil for around $80 are seeing potential profits of $50-$60, significantly higher than the average range of $20-$25. Companies like Exxon and Chevron, which integrate both oil extraction and refining, are particularly well-positioned to capitalize on these market conditions.
Despite the windfall for oil companies, American consumers are feeling the pinch at the pump. Gasoline prices have surged back above $4 per gallon, reaching $4.10 this week. This is approximately 31% higher than year-ago levels and about $1 more per gallon than before the US and Israel initiated attacks on Iran. The average price for regular gasoline was below $3 before the conflict, indicating a direct impact on household budgets.
The significant profits have not gone unnoticed by lawmakers. Democrats in Congress introduced bills in March to levy a substantial tax on major oil producers' profits from 2026 onwards, with the proceeds intended for redistribution to consumers. Proposed measures include a per-barrel excise tax on companies producing or importing at least 300,000 barrels of oil per day in 2025, with the tax being 50% of the difference between the current oil price and the average price per barrel from the previous year. Similar legislative attempts in prior years, however, have failed to pass.
While the conflict has boosted most companies' bottom lines, there have been some operational challenges. ExxonMobil experienced a reduction in output due to Iran's strikes on key assets in Qatar and the United Arab Emirates. In May, ExxonMobil reported that downed LNG trains in Qatar would result in a loss of roughly 100,000 oil-equivalent barrels per day. Despite these disruptions, the overall impact on the industry's profitability has been overwhelmingly positive.
