Oil companies are reaping historic windfalls from the Iran conflict, and experts warn the cash deluge could derail years of climate progress by supercharging the industry's political muscle and slowing the transition away from fossil fuels.
The conflict has triggered an energy shock that sent crude prices soaring. ConocoPhillips reported $2.3 billion in profits for the first quarter of 2026, an 84 percent jump from pre-war levels. Valero Energy posted $1.2 billion in quarterly earnings that beat expectations. Liberty Energy, the company founded by Trump's energy secretary Chris Wright, saw earnings climb 32 percent to $10 million. BP reported "exceptional" performance with profits more than doubling in the quarter.
Chevron and ExxonMobil initially saw profits decline in the first quarter, but analysts expect sharp reversals ahead. ExxonMobil's second-quarter earnings are projected to more than double year-over-year, while Chevron is forecast to see profits jump 56 percent for the full year.
The surge in corporate profits has a dark underside for ordinary Americans. Gasoline prices hit $4.52 per gallon this week, the highest since July 2022, straining household budgets across the country.
"The reason why oil companies are doing so well right now is exactly because Americans are hurting," said Kelly Mitchell, executive director of Fieldnotes, an oil and gas industry watchdog. "Their business interest is to extract as many dollars out of a barrel of oil as possible, and the folks on the other side are Americans just trying to fill up their gas tank."
The Trump administration has shown little concern about fuel costs. The president dismissed the price spike as a "very small price to pay" and his team has moved aggressively to support the industry. The administration already ended Biden-era restrictions on liquefied natural gas exports, a move that has pushed U.S. gas prices higher.
Representative Sean Casten, a Democrat from Illinois, said the administration is clearly prioritizing oil producers over consumers. "If you are a U.S. oil producer, you are really happy right now, and if you're a U.S. oil consumer, you're really not," Casten said. "There are a lot more oil consumers than producers in the United States, and this White House seems to be ignoring the overwhelming majority of Americans."
The windfall is arriving at a crucial moment for the oil sector. Trump's One Big Beautiful Bill Act, passed in 2025, represents what green advocates call the biggest expansion of fossil fuel subsidies in a generation. With cash-rich coffers, the industry now has ammunition for its next phase of political action.
Lukas Shankar-Ross, deputy director at Friends of the Earth, said the profits will be weaponized to cement industry wins. "Windfall profits from Trump's war will allow big oil to build a wall of money around its Trump-era political victories," he said.
History offers a cautionary precedent. When Russia invaded Ukraine and triggered the last major fuel shock, the U.S. oil industry ramped up lobbying efforts, using the supply crisis to demand more drilling rights and argue for expanded domestic production on national security grounds. Many oil majors simultaneously dialed back their climate commitments as profits soared and investment opportunities in fossil fuels opened up.
Gregor Semieniuk, an economist at the University of Massachusetts Amherst, said the dynamic is repeating. "Cash flows are up, so there's more money to go around, including for lobbying," he said. "In the U.S., there's also the narrative that the U.S. is lucky to have its own fossil fuel supply. So they are helped by the ability to capitalize on being the saviors of the moment."
The influx of capital into oil and gas will likely slow investment in clean alternatives, said fellow UMass economist Isabella Weber. "That is exactly the opposite of what we want from the perspective of climate change mitigation, as it strengthens the fossil fuel industry as a political constituency," she said.
There are some countervailing forces. Renewable energy has become dramatically more cost-competitive since the Ukraine shock in 2022, and in March the United States generated more electricity from renewables than natural gas for an entire month for the first time. High gas prices are also beginning to erode Trump's political standing, creating potential openings for a pro-environment candidate in 2029.
Still, Weber acknowledged the odds are stacked against climate progress in the near term. "Is this a big boost to big oil? Of course, absolutely," she said.
Author James Rodriguez: "The oil industry is using geopolitical chaos as a get-out-of-jail card while ordinary Americans pay at the pump, and nobody seems willing to stop it."
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