Big Oil Earnings Hit $36 Billion as War Pushes Prices to $113

Drivers in Bernalillo County are paying more for gas, and the companies selling it are reporting record profits. ExxonMobil, Shell, and Chevron announced their third quarter results this week. The three firms combined for just over $36 billion in earnings. This surge is directly tied to the war in Iran, which has disrupted oil supplies from the Middle East. With less crude moving through that region, oil from the Americas and Europe has become more valuable.

Brent crude is trading at $113 per barrel. Before the conflict began, the price sat around $70. Demand for gasoline, diesel, and heating oil has remained steady as people continue to drive, farm, and heat their homes. Dan Pickering, founder of Pickering Energy Partners, explained that major companies are selling their barrels at much higher prices. He noted that the loss in the Middle East translates to a gain for U.S. and European oil and gas firms.

ExxonMobil reported $15.4 billion in earnings, more than doubling its total from the same period last year. Shell earned $10.8 billion, nearly doubling its previous results. Chevron saw an 180 percent increase, bringing its earnings to $9.9 billion. Executives stated that a large portion of these profits is being returned to shareholders through dividends and stock buybacks. Shell executed one of its largest buybacks ever, while Exxon announced its highest quarterly dividend on record.

Despite the cash flow, executives say they are cautious about new spending. Pickering described the current moment as unusual, with prices driven by geopolitical events rather than long-term demand shifts. He advised that companies are holding cash in the bank to watch how the market moves into 2027. This strategy allows firms to insulate themselves when prices inevitably cycle back down.

The rising oil costs have pushed gasoline prices up by about $1.20 per gallon compared to a year ago, according to AAA. Diesel prices hit a record high in September and remain near that peak. Exxon CEO Darren Woods acknowledged the impact on people's lives during his earnings call. He said his team is maximizing production to help keep prices down. Chevron CEO Mike Wirth made a similar point, stating the company is focused on helping consumers get as much product as possible from their systems.

Shell CEO Wael Sawan noted that global oil reserves are at low levels. The U.S. Strategic Petroleum Reserve has been drawn down, and Europe has released some of its crude and diesel stocks. Sawan said it will take considerable time to refill these inventories. He admitted that he did not expect prices to remain this high after the conflict started, viewing the initial spike as temporary.

Democrats in Congress have introduced bills to tax these windfall profits. They argue that excess gains from geopolitical events should be returned to Americans through tax rebates. Senator Sheldon Whitehouse, a sponsor of one such bill, pointed out that renewable energy sources are not raising their prices. Economist Isabella Weber of the University of Massachusetts Amherst said windfall taxes help bridge the gap between corporate profits and consumer costs. She described the current situation as a contradiction where the worst energy supply crisis in decades is generating record profits.

Oil executives have generally pushed back against these taxes. Last quarter, Exxon's Woods called them a misguided policy that penalizes successful companies. As the midterms approach, the Trump administration has taken steps to lower fuel prices. These measures include temporarily loosening rules for dyed diesel and lifting sanctions against Russia to allow more diesel into the market. However, analysts say these efforts are unlikely to significantly lower U.S. prices before the election on Tuesday.