The world's largest international oil companies face a $32bn dilemma over how to use the huge windfalls from the conflict in the Middle East. Exxon Mobil, Shell, Chevron, Total Energies and BP collectively earned more than $75bn in adjusted profits in the first half of the year, up 75 per cent from the $43bn they earned in the same period of 2025, while their free cash flow has nearly doubled. Investors are keen to learn how they plan to deploy the extra cash as they prepare to report third-quarter earnings later this month.
The majors have benefited from crude prices that are on average a third higher year-to-date, as the US war with Iran drags on and disrupts energy markets. European gas prices have surged 155 per cent since the conflict began in February, diesel prices have almost doubled, and trading teams have enjoyed bumper returns. The performance echoes the 2022 windfall, when Russia's invasion of Ukraine pushed the five majors' earnings up 125 per cent. This time, however, they have so far escaped windfall taxes.
BP said it would use its windfall to cut debts and other liabilities by $9bn-$10bn in the third quarter, well ahead of its targets. New chief executive Meg O'Neill has made clear that repairing the group's battered balance sheet is the overriding priority. "Now is not the time for us to be increasing spending," she said at the Energy Intelligence forum in London. Executives have been careful not to commit to additional spending or big acquisitions, given uncertainty over how long the Iran war will last.
Total Energies became the first major to outline its thinking, pledging to raise dividends every year until 2030 and buy back more shares. Chevron chief executive Mike Wirth said any windfall "belongs to our shareholders" and should flow back to them over time. Chevron expects to raise capital expenditure to between $18bn and $19bn this year. Analysts expect the pressure to grow for companies to channel extra cash into oil and gas reserves, favouring quick-return projects near existing platforms and pipelines.
Source: Financial Times Companies · Summarized by HeadlinesBriefing