US Oil Giants' Profits Pass $130bn Amid Iran War as Consumers Pay $150bn Extra

Profits at major US oil and gas companies have passed $130 billion amid the Iran war, while ordinary people are carrying the burden of higher fuel costs — since the war began, US consumers have spent an extra $150 billion on petrol and diesel alone, more than $1,150 per family.

The figures were reported by Al Jazeera on Monday (November 2). According to the report, 51 major US oil and gas companies together made more than $130 billion in profit in the six months from April to September. In the same period a year earlier, their profit was less than $47 billion.

Meanwhile, an analysis by Brown University's Climate Solutions Lab found that since the war began on February 28, people in the United States have spent an extra $150 billion buying petrol and diesel. As fuel companies' profits rise on one side, consumers are struggling to manage the cost of living on the other.

Analysts say both crude oil producers and refiners are benefiting from the war. Higher world crude prices let producers sell oil for more, while reduced supply of refined fuels such as diesel has also raised refiners' earnings.

Attacks on energy infrastructure in the Middle East and Russia, disruption to shipping in the Strait of Hormuz and various sanctions have created a supply crisis in the world market. In this situation, US energy installations in a comparatively safe position are gaining extra advantage.

The country's two largest oil companies, ExxonMobil and Chevron, reported profits of $10 billion to $15 billion. Valero Energy's third-quarter profit rose more than sixfold to $6.83 billion, and Phillips 66 also reported record quarterly profit.

In response to US and Israeli attacks, Iran has carried out missile and drone strikes on installations in Gulf countries. Disrupted shipping in the Strait of Hormuz has raised concern over world fuel supply, and there are fears of conflict spreading anew in the Bab al-Mandeb strait, which connects the Red Sea and the Gulf of Aden.

Analysts fear the fuel market's instability will not ease easily without a lasting settlement between the United States and Iran. Florence Schmidt, a senior energy strategist at London-based Rabobank, believes fuel prices in the United States and other countries could remain high next year because of the supply crisis.

Higher fuel prices have already begun to affect transport, electricity and food markets. According to the UN Food and Agriculture Organization, world food prices rose another 1.5 percent in September. The World Bank forecasts commodity prices could rise by up to 23 percent this year.

Analysts say high fuel prices will raise oil companies' profits and shareholder earnings in the short term. But if the situation lasts a long time, economic growth could be hampered and even the risk of a world economic recession could rise.

Without a diplomatic settlement, there are fears of conflict spreading anew, which could disrupt shipping in the Strait of Hormuz further, prolonging the fuel supply crisis and price pressure worldwide, analysts warn.