Middle East escalation lifts oil and gas prices, boosting energy majors’ Q1 profits

A late-February escalation in the Middle East involving the United States, Israel and Iran has pushed up global oil and gas prices asourceser the Strait of Hormuz was closed, supporting strong first-quarter results for major energy companies.

BP reported first-quarter earnings of $3.2 billion, above projections of $2.63 billion, and its shares rose 2.5% on the day of the announcement. TotalEnergies reported a 29% jump in first-quarter earnings to $5.4 billion. ExxonMobil’s first-quarter earnings were lower, though the article notes that some March sales are expected to be reflected in the company’s second-quarter report.

Analysts cited in the source expect oil prices to spike even if the Strait of Hormuz reopens soon, suggesting elevated profits could persist. Separately, Oxfam International projected fossil fuel companies could earn $3,000 per second in 2026.

Human and household costs

The source describes heavy casualties from the conflict, including more than 3,000 Iranian deaths—among them more than 150 schoolgirls and teachers—along with more than 2,000 Lebanese deaths and 23 Israeli deaths.

Higher energy prices also raise costs for consumers. The Centre for Research on Energy and Clean Air (CREA) reported that in 2022, European Union citizens effectively paid an additional 150 euros ($175) per year to the United States because of increased fossil gas and power costs.

Structural vulnerability and investment gap

The article argues that the global energy system remains exposed because critical fuel supplies move through narrow, vulnerable chokepoints, contributing to recurring price shocks.

It also notes that while clean energy alternatives such as wind, solar and electric vehicles have become cheaper than during the 2022 crisis, the oil and gas industry invested 4% of its capital expenditure in clean energy in 2023, a year when the sector earned $2.7 trillion.