Iran war fuels record profits for oil majors and refiners, while consumer spending weakens

A wave of second-quarter earnings reports on Tuesday laid bare the uneven impact of the Iran war on corporate America. Energy producers and refiners rode crude prices that averaged $126.41 a barrel for Brent in April to their best results in years, while consumer-facing companies struggled with cautious household spending.

Marathon Petroleum, the top U.S. refiner, posted its highest quarterly profit since 2022. Adjusted earnings reached $17.73 per share, more than four times the $13.73 analysts had expected. The company's refining and marketing margin doubled to $36.33 per barrel from a year earlier, as the effective closure of the Strait of Hormuz and Iranian attacks on Middle East refineries squeezed fuel supplies. Marathon's crude capacity utilization was 94%, with total throughput of 2.9 million barrels per day.

BP reported second-quarter profit of $5.7 billion, also its highest since 2022, and said the surge in cash flow allowed it to bring forward its net debt reduction target by one year to end-2026. CEO Meg O'Neill, who took over in April, has moved quickly to restructure the company, cutting jobs, dismantling its low-carbon division, and putting its North Sea business up for sale. EOG Resources, the U.S. shale producer, beat estimates with adjusted profit of $5.07 per share, as its average realized oil price jumped to $98.15 per barrel from $64.82 a year earlier. Suncor Energy also topped expectations, helped by higher crude realizations and a second-quarter record refinery throughput of 470,600 barrels per day.

Outside the energy patch, the picture was mixed. Emerson Electric beat revenue and profit estimates on robust industrial automation demand. Lumen Technologies exceeded revenue forecasts as it expanded digital networking services. Pfizer raised the lower end of its full-year revenue outlook after strong Eliquis sales drove a profit beat. But Mattel missed profit estimates by a wide margin, earning just 1 cent per share against the 4 cents expected, as consumers cut back on traditional toys and shifted spending toward tabletop and digital games. The company kept its annual forecasts unchanged, betting on a recovery later in the year.