Oil majors post soaring Q2 profits as Iran war sends crude above $126

Price shock

The war in Iran, which erupted in late February 2026, nearly shut the flow of Middle East cargoes through the Strait of Hormuz, the chokepoint for about a fifth of global oil and gas. Brent crude rocketed from an average of $69.82 a barrel in January to $126.41 in April, while West Texas Intermediate jumped from $65.17 to $109.64. The supply squeeze persisted through the second quarter, keeping benchmark prices elevated and handing producers enormous pricing power.

Profit surge

Saudi Aramco, the world's largest oil company by production, reported net profit of $32.69 billion for the three months to end-June, a 44% increase on higher sales of crude, refined products and chemicals. The Financial Times put adjusted profit at $33.4 billion, a 33% year-on-year rise. BP's underlying replacement cost profit, the measure it uses as a proxy for net income, more than doubled to $5.73 billion from $2.35 billion a year earlier, against $5 billion on the LSEG-compiled consensus and $5.11 billion in BP's own analyst poll, and the company lifted its dividend 4% to 8.66 cents per ordinary share. ExxonMobil's quarterly profit more than doubled year on year to $14.5 billion, while Chevron's earnings rose by nearly 400% to $12 billion from $2.5 billion a year earlier. President Donald Trump singled out both companies on Monday, telling reporters at the White House that they were “making too much money based on a shortage” and that he did not like it.

US shale windfall

Diamondback Energy posted adjusted earnings of $6.48 per share, above the $6.01 estimate, with a realized oil price of $94.33 per barrel compared with $62.34 a year earlier. ConocoPhillips, Occidental Petroleum, EOG Resources and Devon Energy are also expected to report sharply stronger second-quarter numbers. Analysts say the earnings boost rivals the windfall that followed Russia's 2022 invasion of Ukraine, but the industry's response is different this time.

Crude markets could become oversupplied if the U.S.-Iran conflict is resolved.

Morningstar's Joshua Aguilar noted that stronger balance sheets and disciplined spending leave shale producers better positioned than in 2022 to withstand lower oil prices. Enverus analyst Drew Depoe said most of the incremental cash flow would likely be returned to shareholders, while Arif Gasilov of Gasilov Group observed that producers entered the latest geopolitical shock with much stronger balance sheets. Rystad Energy's Matthew Bernstein added that only Diamondback explicitly linked stronger oil prices to higher activity.

BP's strategic pivot

BP used its results to launch a process to market its US biogas business Archaea for a potential sale. The unit was bought in 2022 for $4.1 billion, as it continues to retreat from an earlier renewables push abandoned in 2025. The company has also completed the sale of its Gelsenkirchen refinery, agreed to sell its retail business in Austria and announced its intention to sell its UK North Sea business.

I have had a conversation with the prime minister and the message I left him with is the UK gets 75 per cent of its energy from fossil fuels, the first barrel we consume should be coming from the North Sea.

Chief executive Meg O'Neill told CNBC that several players had already made unsolicited approaches for the North Sea assets, and she had relayed her view to new UK leader Andy Burnham.

Capital discipline

Across the sector, the profit gusher is not translating into a drilling boom. Clayton Allison of Prime Capital Financial told Reuters that oil majors "can leverage pricing power for a long time" as the world struggles to replenish reserves, but that does not mean they will be confident enough in future demand to invest in new drilling. The preference for dividends, buybacks and balance-sheet repair echoes the post-2022 playbook, and analysts see it persisting even if the Iran conflict eases and crude prices retreat.