Oil and war: why energy majors just posted blowout profits

Photo: Zifeng Xiong · Pexels

When crude rises on geopolitical tension, not everyone loses out. BP posted quarterly profit of more than $5 billion, more than double the prior period, while Aramco, Saudi Arabia's state oil giant, reported a 44% jump in net profit. Both companies point to the same driver: rising oil prices tied to the conflict surrounding Iran.

The escalation includes very specific episodes, such as a ship struck in the Strait of Hormuz, one of the world's most sensitive shipping routes for crude. The United States has called talks with Iran a 'last chance' to avoid an open war, while Tehran denies any negotiations are underway. That uncertainty is precisely what is pushing barrel prices higher.

Profits that stir political tension

Former President Trump has publicly criticized major oil companies for 'making too much money' in this context, a critique that reflects a familiar paradox: the same episodes that make gasoline more expensive at the pump also fatten the results of those who extract and sell crude. It's a mechanism that repeats every time a conflict threatens global energy supply.

Meanwhile, OPEC+ has decided to raise production, though analysts consider that increase irrelevant in the short term, even if it could matter more later should geopolitical tension ease. Understanding this double speed, supply decided in weeks versus conflict measured in days, is key to grasping why oil prices move the way they do.