The ongoing conflict involving Iran has created major disruption in global energy markets. While the situation has caused damage to oil and gas infrastructure and reduced supply, it has also opened the door for large profits—especially for Europe’s biggest oil companies. Firms like BP, Shell, and TotalEnergies have taken advantage of extreme price changes and earned billions through their trading activities.
The war, which began in late February and involves the United States, Israel, and Iran, has impacted key energy routes. One of the most important areas affected is the Strait of Hormuz, a critical pathway for global oil shipments. Damage to infrastructure and shipping disruptions have limited the supply of oil and gas in the market. As a result, prices have become highly unstable, creating sharp ups and downs.
While such instability can be risky, it also creates opportunities for companies with strong trading operations. European oil majors have spent decades building large trading divisions. These teams actively buy and sell oil, gas, and refined products across global markets. They also use financial instruments like futures and derivatives to benefit from price differences over time and between regions.
In the first quarter alone, the combined trading profits of BP, Shell, and TotalEnergies are estimated to be at least $2.5 billion. These gains have helped offset losses in production caused by the conflict. For example, some facilities had to shut down or reduce output due to safety concerns or supply chain disruptions. However, the profits from trading have more than balanced these setbacks.
BP has described its recent trading performance as “exceptional,” a term it rarely uses. This shows just how strong the company’s results have been during this period. Similarly, Shell has reported that its trading division performed well and helped support overall earnings. TotalEnergies also expects a significant increase in its quarterly profits, even though part of its production has been affected by the conflict.
One key reason for this success is the scale of trading operations in European companies. For instance, BP trades volumes many times higher than its actual production. Shell is known as one of the world’s largest traders of liquefied natural gas, handling massive daily volumes. TotalEnergies is also highly active in both physical oil trading and derivatives markets. This allows them to respond quickly to market changes and maximize profits.
In contrast, major U.S. oil companies like ExxonMobil and Chevron follow a different strategy. Their trading operations are mainly used to support their own production, refining, and distribution systems. Instead of trying to profit from market volatility, they focus on maintaining stable and predictable earnings.
This more cautious approach has its advantages during normal times, but it limits their ability to benefit from sudden market changes. As a result, U.S. companies have not performed as strongly as their European counterparts during the current crisis. In fact, both ExxonMobil and Chevron have warned that their earnings could take a hit in the first quarter.
ExxonMobil has indicated that it may face a loss of over $5 billion due to timing issues in its contracts and delays in deliveries. Chevron has also reported potential losses of up to $3.7 billion for similar reasons. However, both companies expect these losses to be temporary and believe that profits will improve in the coming months.
The difference in strategies is also visible in the stock market. Since the start of the conflict, shares of BP, Shell, and TotalEnergies have risen significantly. Investors appear confident in their ability to manage volatility and generate profits. On the other hand, shares of ExxonMobil and Chevron have declined, reflecting concerns about their short-term performance.
Overall, the Iran war has highlighted a key contrast in how global oil companies operate. European firms have embraced trading as a major source of income, allowing them to turn market uncertainty into opportunity. Meanwhile, U.S. companies have chosen a more conservative path, prioritizing stability over high-risk profits.
As the situation continues to evolve, it remains to be seen whether these strategies will change. However, for now, European oil majors are clearly leading the way in benefiting from one of the most volatile periods in the energy market.
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