Oil Majors Expect Profit Surge From Iran Conflict

Global oil majors are projecting a substantial increase in third-quarter profits resulting from refining and trading gains tied to the US-Israeli war on Iran. Since airstrikes began in February, disruptions in the Strait of Hormuz have pushed energy prices to multi-year highs, significantly boosting downstream margins.

Shell plc, BP, and TotalEnergies expect refining margins to increase three to four times compared to the previous year. ExxonMobil anticipates a potential $4.5 billion boost in downstream profit, while TotalEnergies expects its refining and chemicals cash flow to double to approximately $4 billion. Shell is expected to announce a $3.5 billion buyback for the fourth quarter.

Companies are utilizing these windfall gains differently. ExxonMobil and Chevron Corp. have focused on paying down debt, with Chevron also pursuing contract extensions for its joint venture oilfield in Kazakhstan. BP is using the cash to repair its balance sheet and expects to meet debt reduction targets a year ahead of schedule.

Earnings reports are scheduled for October 29 and 30, and BP plans to provide a strategy update on December 15.