The unexpected gift from Donald Trump that is benefiting the big oil companies

The cost of filling up the tank keeps coming up in conversations. With each passing day, consumers feel the impact of rising fuel prices a little more. But on the other side of the ledger, the major international oil companies are posting soaring profits thanks to an unexpected gift from Donald Trump: the surprise attack by the United States and Israel on Iran on February 28, which sparked a Middle East conflict, has been a boon for ExxonMobil, Chevron, Shell, TotalEnergies and BP.

The blockade of the Strait of Hormuz, through which 20% of the world’s crude oil and liquefied natural gas normally passes, pushed oil prices higher — Brent is up more than 65% for the year and has again topped $100 a barrel — as well as the cost of refined products. As a result of the largest supply disruption in history, oil companies are reaping record profits.

Between April and June, the first quarter to fully reflect the war’s impact, the Big Oil companies earned a combined $46.8 billion (€40.4 billion), 167% more than in the same period of 2025, although still short of the 2022 record after Russia attacked Ukraine. Exxon tripled its profits and in one quarter made half of what it earned in all of 2025. Chevron, meanwhile, quintupled its gains compared with the second quarter of last year.

To understand what is happening and why, it is necessary to review how this business works. The chain begins with exploration and production, when oil is extracted from land or sea — what is known as upstream. That crude is sold on global markets and its price is set by supply and demand. The next phase, called downstream, involves turning it into gasoline, diesel, fuel oil or jet fuel at refineries, which are then distributed via pipelines, ships or tanker trucks to gas stations.

In the current scenario, marked by a supply shock that governments have tried to ease by releasing strategic reserves, oil companies are earning more on every barrel they extract. Scarcity has pushed prices up.

And returns are particularly strong for firms that, in a policy environment penalizing fossil fuels, have continued to bet on the downstream business and on being present across different parts of the chain — such as Exxon, which runs the largest refinery network in the world outside China, as well as BP, Shell or Repsol.

Refining margins (the crack spread) — the difference between crude costs and the selling price of derived products — exceed $30 a barrel, when the traditional threshold is between $6 and $8 — and during the Covid pandemic they even turned negative. “This level has been seen very few times,” says Javier Ferrer, a partner at McKinsey.

One reason for this is the lack of global refining capacity. The war in the Middle East and Ukraine’s attacks on Russia — one of the biggest diesel exporters — have reduced refining capacity, which is declining in Europe due to the advance of electrification and is at 98% utilization in the United States. China, which banned gasoline and diesel exports after the closure of Hormuz, resumed exports this summer.

The other factor is that, surprisingly, the system is absorbing the shock. “There is sufficient and solid demand at the current price of crude,” emphasizes José Manuel Amor, managing partner for Economic and Market Analysis at AFI. “If Hormuz had been closed at another time, oil could have topped $200 a barrel. Today the system is more resilient and more diversified than in the 1970s, and has more slack to absorb a disruption of this magnitude,” Ferrer adds.

However, refining is the new choke point and refined product prices are decoupling from crude oil prices, coming to be traded based on inventories. That means that even if the price of crude falls, gasoline or diesel — which power logistics, industry and transportation — could remain high and feed inflation, forcing monetary authorities to raise interest rates further to cool the economy, destroy demand and force an adjustment in the market.

Experts believe the windfall cycle for oil companies will continue in the short term, and they will try to make the most of it. Gonzalo Escribano, lead researcher and director of the Energy and Climate Program at the Real Instituto Elcano, highlights the resilience of Big Oil, an example for other sectors: “Geopolitics is built into their risk management map, they have a great capacity to seek partnerships and a high level of technology that allows them to change technical specifications in weeks.”

Dividends and debt reduction

Pilar Aranda, an analyst at Bankinter, says: “The outlook for the next two years is good. Our forecast is $85 a barrel in 2026 and $80 in 2027, and major oil companies such as Chevron reach breakeven from $50. There are technology improvements and increasing efficiency, and they are using extra resources to clean up their balance sheets, reward shareholders through dividends and buybacks, and to invest.” The Big Oil firms have generated nearly $113 billion of cash through June, and their shares are up between 28% and 40% for the year.

In many cases, that investment is focused on renewable generation assets to advance the energy transition. Nonetheless, “fossil fuels are going to be more necessary and the major oil companies will invest in countries such as the United States, Venezuela and Guyana,” Aranda says, citing BP’s intention to redirect focus toward hydrocarbon businesses.

Government reactions

However, a threat in the form of taxes looms. Last month, Trump — who has a soft spot for the oil companies — said: “They are making too much money; I don’t like it.” Obsessed with bringing gasoline prices down ahead of the November midterms, he is probing whether there is “speculation.”

On the other side of the Atlantic, several European governments also appear to be making moves. Sara Aagesen, Spain’s minister for Ecological Transition, has asked Brussels for a permanent tax on the profits of oil and gas companies. Such a measure could put investments on hold and, according to Víctor Peiró, an analyst at GVC Gaesco, squeeze citizens’ wallets further. “It’s a cost increase that will be passed on to consumers, as happened in 2022. It’s negative in the short term and, if not removed, will cause a structural rise in gasoline prices.” For Amor, “if introduced, it should be temporary and proportionate.” After the war in Ukraine, Spain imposed an extraordinary levy of 1.2% on domestic revenues for companies such as Repsol, Moeve, Iberdrola and Endesa. It remained in force until January 2025.

While Europe considers its options, the geopolitical game remains open, with the Big Oil firms riding a tailwind that will not last forever.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition