Will US oil companies be the big winners from the Iran war?

By John BIERS
New York (AFP) Mar 3, 2026
Energy prices have surged dramatically since the United States and Israel launched their attack on Iran Saturday, and that will almost certainly translate into bigger profits.

But the question remains whether the new war in the Middle East also leads to increased oilfield investment.

- What does the Middle East war mean for US oil industry profits? -

Geopolitical crises lift oil industry profits if a supply disruption causes commodity prices to spike. That's what happened after Russia invaded Ukraine.

In the third quarter of 2022, ExxonMobil and Chevron reported more than $30 billion in profits between the two companies. The results were boosted by a surge in crude and natural gas prices.

Brent oil futures briefly surged above $85 a barrel Tuesday, while European natural gas prices reached their highest level since 2023.

These increases show the market's response to the effective shutdown of the Strait of Hormuz, a waterway accounting for some 20 percent of global crude supplies. The jump in the natural gas market is due to QatarEnergy's suspension of liquefied natural gas (LNG) production.

"Certainly, the producers get a benefit when prices go up like this," said Again Capital's John Kilduff. "This will definitely help their bottom lines."

The question is whether commodity prices will stay high.

- Will US companies invest to produce more oil and natural gas? -

Energy industry analysts don't expect companies to drill more wells or increase capital budgets unless they conclude the outages will be lengthy. Investments in projects that don't come online for months or years requires confidence prices will stay high.

"What US companies would need to see would be a sustained higher price," said Dan Pickering of Pickering Energy partners in Houston, who thinks oil prices could reach $100 a barrel if the Strait of Hormuz stays empty for a meaningful duration.

But such a lengthy outage is far from a sure thing.

President Donald Trump -- closely attuned to the political implications of gasoline prices ahead of mid-term elections -- said Tuesday that the US navy would escort oil tankers through the Strait of Hormuz if needed, and ordered Washington to provide insurance for shipping.

The announcement prompted a modest pullback in oil prices, which finished below session highs.

Oil prices could retreat further if the United States, China and other countries tap emergency stockpiles, said Ken Medlock, a fellow at the Baker Institute for Public Policy at Rice University in Houston.

Futures markets currently show oil prices retreating gradually in the second half of 2026, implying "the market is seeing it as a short-term" disruption, Medlock said.

- How much could US energy supply grow and where would investments go? -

While the US energy industry is poised to benefit from Middle East oil and gas outages, the United States "cannot simply 'flip a switch' to replace large, sudden Middle Eastern outages," said Brian Kessens, portfolio manager at Tortoise Capital.

Some elements of the petroleum industry have already benefited from the upheaval. Kessens said refined products dislocated by the Hormuz outage has boosted profit margins for Gulf Coast refiners.

Other short-term winners include LNG exporters who have capacity not committed in contracts.

Despite this, "meaningful incremental supply typically requires months to years," Kessens said.

Among the potential upstream oil and gas candidates, analysts said the most likely pick for incremental additional investment would be shale properties such as the Permian Basin in the US, where oil companies are already active and which have a shorter payback compared with other prospects.

"The focus would be on short-cycle, quick results activity. US shale, maybe a little bit of Venezuela," Pickering said. "Then it would move to longer-term projects like exploration and offshore."

Iran hits US targets in Gulf as Tehran targeted
Tehran (AFP) Mar 3, 2026 - Iran expanded its retaliatory missile and drone barrage across the Middle East on Tuesday, hitting another US consulate and base, even as the United States and Israel said they had pummeled key sites inside Tehran.

With global energy prices on the rise, Trump said the US Navy was ready to escort oil tankers through the Strait of the Hormuz, the vital chokepoint into the Gulf that Iran has threatened to seal off.

Risking more regional chaos, an Iranian drone attack struck near the US consulate in Dubai, starting a fire but inflicting no casualties, and the US military base at Al-Udeid in Qatar.

The attacks came a day after strikes on the US embassies in Riyadh and Kuwait City and on a US air base in Bahrain, as Washington ordered diplomats to evacuate.

"We are saying to the enemy that if it decides to hit our main centres, we will hit all economic centres in the region," Islamic Revolutionary Guard General Ebrahim Jabbari said.

The United States and Israel launched the attack on Saturday and quickly killed Iran's supreme leader, Ayatollah Ali Khamenei, two days after US envoys had been speaking to Iran in Geneva on a nuclear accord.

Trump insisted that Iran wanted to resume talks but it was "too late".

He also walked back a statement the day before from Secretary of State Marco Rubio, who said the US attack's timing was precipitated by Israel's plans to strike.

"If anything, I might have forced Israel's hand," Trump said as he met German Chancellor Friedrich Merz at the White House.

Trump boasted that "just about everything's been knocked out" in Iran, including its navy, air force and air detection, and said the attacks had killed even leaders who could have taken over.

"Most of the people we had in mind are dead," Trump said. "Now we have another group. They may be dead also, based on reports."

According to Iranian media, US and Israeli strikes targeted a building on Tuesday in the holy city of Qom belonging to the committee that is to elect a new supreme leader. The Tasnim news agency reported that strikes had already targeted the body's main headquarters in Tehran the day before.

- Lebanon violence expands -

The regional war also took a growing toll on Lebanon, where Hezbollah, the armed Shiite Muslim movement that long had Tehran as a benefactor, launched drones and rockets at Israel in retaliation for Khamenei's slaying.

Hezbollah said it targeted the Israeli naval base in the northern city of Haifa and Israel said it struck Beirut's heavily Shiite southern suburbs.

The United Nations said that more than 30,000 people were displaced in Lebanon, where dozens have been reported dead.

In a throwback to earlier wars, Israel said it was moving troops across the border to create a buffer zone inside Lebanon.

Loud explosions again hit Tehran, where photos showed damage to Mehrabad airport, which handles mainly domestic flights in Iran.

The Israeli military announced a strike on an underground facility on the eastern outskirts of Tehran where it said Iranian "scientists operated covertly to develop a key component for nuclear weapons".

Iran's foreign ministry spokesman said the UN Security Council "has a duty" to act to stop the war, even as its military remained publicly defiant in the face of the campaign.

Iran has vowed to take an economic toll in retaliation for the war and to make the United States pay a cost.

The United States ordered non-emergency personnel to leave embassies in much of the region and encouraged all Americans to leave if they can find commercial flights, although air travel has been severely disrupted.

Qatar said it had downed missiles targeting Hamad International Airport in Doha, while Oman reported several drones attacking the port of Duqm, and in the UAE falling debris from an intercepted drone caused a fire at an oil storage and trading zone, authorities said.

- Ghost town -

In Tehran, residents who have not fled remained shut away in their homes for fear of the US-Israeli bombardment.

The Iranian capital is normally home to around 10 million people, but in recent days "there are so few people that you'd think no one ever lived here", said Samireh, a 33-year-old nurse.

Authorities had previously urged people to leave the city, and police officers, armed security forces and armoured vehicles have been stationed at main junctions, carrying out random checks on vehicles.

In the more upmarket north of Tehran, the meowing of cats and chirping of birds replaced the usual din of traffic jams.

The assault came weeks after Iranian authorities clamped down on mass protests, although Trump has said that regime change is not his main goal.

Israel's Foreign Minister Gideon Saar urged foreign capitals on Tuesday to cut all ties with Tehran "following the Iranian regime's attacks on all its neighbours and the massacre of its own people".

China's Foreign Minister Wang Yi, according to the official Xinhua news agency, warned Saar in a call that Beijing opposes the strikes, saying the use of force "will only bring new problems".