$48 billion profit! 5 global oil majors cash in on oil surge amid Iran war. Where is money flowing?

The five oil supermajors - Exxon Mobil, Chevron, BP, Shell, and TotalEnergies - reported a combined $48 billion profit in the first quarter of the year, driven by higher fossil fuel prices amid the conflict between the US and Iran. Oil prices reached over $100 per barrel, marking a significant increase. During the same period, the companies generated nearly $90 billion in cash, the highest level ever recorded.

The substantial earnings have raised political eyebrows. US President Donald Trump criticized Exxon and Chevron for making excessive profits from the higher fuel prices during the Iran war, reiterating his demand for lower prices at the pump. Much of the additional cash has been directed towards building reserves and reducing debt, according to analysis by the Institute of Energy Economics and Financial Analysts (IEEFA). Cash reserves across the five supermajors increased by $17 billion from the previous quarter.

Industry executives are focusing on areas within their control during the Middle East conflict. BP CEO Meg O'Neill emphasized the company's efforts to maximize the availability of products needed by consumers, such as jet fuel and diesel, by optimizing its refining operations. Shell CEO Wael Sawan described volatility as the new normal, stating that higher commodity prices have provided a strong tailwind for the company's results.

The American Petroleum Institute (API), representing about 600 drilling companies, refiners, and other industry participants, noted that the oil and gas sector is cyclical and should be evaluated over decades rather than quarters. The API also opposed calls for a windfall tax on excess profits, arguing that such taxes would not lower consumer prices and could discourage long-term investments needed to strengthen supply, infrastructure, and energy resilience.

Experts predict that the duration of the supply disruption will significantly impact future oil prices. JPMorgan estimates that each additional month of disruption could add $7 to $8 per barrel to Brent prices. If the disruption persists for three months, the bank expects average monthly Brent prices to reach around $114 per barrel.

Goldman Sachs warns that Brent could rise to $120 per barrel if shipping disruptions through the Strait of Hormuz, the world's most crucial oil transit route, continue. However, Goldman expects Brent to average $80 per barrel in the fourth quarter and $75 per barrel the following year, assuming tensions in the Middle East eventually ease.