As the ongoing conflict in Iran escalates, major oil companies are experiencing a surge in profits, raising alarms among climate advocates and experts about potential setbacks to clean energy initiatives. The turmoil has resulted in a historic energy crisis, prompting soaring prices that not only benefit the oil sector but also threaten to entrench political victories from the previous administration.
Surge in Oil Profits
Recent reports reveal that ConocoPhillips recorded an astonishing $2.3 billion in profits during the first quarter of 2026, reflecting an 84% increase since the onset of the Iran conflict. Similarly, Valero Energy announced quarterly earnings of $1.2 billion, exceeding projections, while Liberty Energy, established by former Energy Secretary Chris Wright, posted a 32% profit increase, totalling $10 million. BP’s performance was described as “exceptional,” with profits more than doubling, while Shell also exceeded expectations for its first-quarter results.
This windfall comes as Americans grapple with rising fuel costs, with gasoline prices hitting an average of $4.52 per gallon—marking the highest level since July 2022. Kelly Mitchell, the executive director of Fieldnotes, highlighted the disconcerting reality that while oil companies thrive, ordinary citizens face financial strain at the pump. “Their business interest is to extract as many dollars out of a barrel of oil as possible, and the folks on the other side of the equation are Americans who are just trying to fill up their gas tank and get to work,” she stated.
Political Ramifications
The implications of these substantial profits extend beyond the market; they pose a significant threat to the progress made in climate policy. Lukas Shankar-Ross, deputy director at Friends of the Earth, articulated concerns that the financial gains from the Iran conflict could fortify the oil industry’s political stronghold, enabling it to resist reforms aimed at curbing fossil fuel dependency. He warned, “Windfall profits from Trump’s war will allow big oil to build a wall of money around its Trump-era political victories.”
The Trump administration has consistently prioritised the oil industry, as evidenced by its termination of a Biden-era ban on liquefied natural gas exports, which has contributed to rising gas prices. Representative Sean Casten, a Democrat from Illinois, noted, “If you are a US oil producer, you are really happy right now, and if you’re a US oil consumer, you’re really not.” He has actively championed renewable energy initiatives aimed at alleviating the burden on American households.
A Complicated Landscape for Renewables
Despite the challenges posed by the current situation, there are signs that renewable energy sources are becoming increasingly competitive. In March, the United States achieved a milestone by generating more electricity from renewables than from gas for the first time in a full month. Economists Isabella Weber and Gregor Semieniuk from the University of Massachusetts Amherst emphasised the potential for renewables to maintain momentum amidst the crisis. However, they cautioned that the current political landscape may favour fossil fuels, as companies use their newfound riches to bolster lobbying efforts and push for greater oil and gas leasing.
The lessons from the previous fuel shock, triggered by Russia’s invasion of Ukraine, serve as a cautionary tale. During that crisis, the oil sector ramped up its lobbying, advocating for increased domestic production under the guise of energy security, while simultaneously retreating from climate commitments. “High profit margins also encourage capital to go into an industry,” Weber noted, warning that this could undermine efforts to mitigate climate change.
The Future of Energy Policy
Looking ahead, the future of energy policy remains uncertain. While rising fuel prices could undermine Trump’s popularity, creating space for a more environmentally conscious leader in the upcoming elections, the entrenched interests of the oil industry pose a formidable challenge. “We may not see the very same trends we saw during the last shock,” Weber suggested, acknowledging that the dynamics of the current crisis could create different outcomes.
As the oil industry capitalises on the turmoil, the need for a sustained commitment to climate action has never been more critical. Advocates are calling for a “working-class climate agenda” that prioritises affordable renewable energy and the modernisation of the nation’s energy infrastructure.
Why it Matters
The unfolding situation underscores a pivotal moment for both the oil industry and the climate movement. As big oil profits soar amidst geopolitical turmoil, the potential for a rollback of climate progress becomes increasingly tangible. This period not only highlights the fragility of energy transitions but also serves as a crucial reminder of the need for robust policies that can withstand the pressures exerted by powerful lobbies. The choices made now will have lasting implications for both the environment and the economic wellbeing of millions, making it imperative that we prioritise a sustainable and equitable energy future.
