The recent rally in oil prices driven by tensions in the Strait of Hormuz is improving the earnings outlook for global energy majors, following a year of declining profits amid weaker crude prices.
Combined profits of leading oil companies fell by about $27 billion year-on-year in 2025, pressured by lower prices and softer refining margins. However, sustained price gains linked to supply disruptions could support a rebound.
Julien Mathonniere, oil markets economist at Energy Intelligence Group, said Brent crude could average around $81 per barrel in 2026 if tensions ease, but warned of significantly higher prices if the crisis persists.
“If the conflict drags on and the Strait of Hormuz remains shut, prices could rise toward $140-$150 or higher,” he said, adding that “every day that the conflict rages on adds a few dollars of upside to the oil prices.”
- Supply shock reshapes outlook
Rising geopolitical risks are prompting companies to reassess investment strategies after years of focusing on the Gulf region.
While higher prices support profitability, Mathonniere said gains are not unlimited.
“You’ll see higher profits, but for company profits to shoot up, prices need to rise to $120 a barrel or above and stay there for several months, not just weeks,” he said, noting that higher operating costs would offset part of the upside.
He added that the International Energy Agency’s release of 400 million barrels from emergency reserves is unlikely to significantly ease the market, as it falls short of the roughly 10 million barrels per day (bpd) supply gap linked to Hormuz disruptions.
Citing Energy Intelligence Group data, Mathonniere said Gulf crude exports have fallen below 7 million bpd, less than 40% of pre-conflict levels of around 18 million bpd.
“Last week, prices fell slightly after the reopening of the pipeline between Iraq's Kurdistan region and Türkiye, but we're talking about at best 200,000 bpd,” he said.
“It’s better than nothing, but it will only compensate for 1% of the Strait of Hormuz deficit. If you maintain a gap of 10–11 million bpd, or about 10% of global oil demand, for several months, you can easily imagine the effect on energy prices and inflation.”
- Big oil profits fall more than 10% in 2025
Weaker oil prices remained the main driver behind last year’s earnings decline, with Brent averaging $68.2 per barrel in 2025, according to Intercontinental Exchange data.
Combined profits of major oil companies fell 10.9% year-on-year to about $220 billion in 2025, down from roughly $247 billion a year earlier.
Among leading firms, Saudi Aramco reported a 5.1% decline in profit to $104.7 billion, while ExxonMobil posted a 14.5% drop to $28.8 billion.
Shell saw profits fall 21.9% to $18.5 billion, and TotalEnergies declined 14.7% to $15.6 billion.
Chevron reported a 30.3% drop to $12.3 billion, while ConocoPhillips fell 13.5% to $8 billion.
BP declined 25.7% to $7.5 billion, Equinor dropped 30.4% to $6.4 billion, and Eni edged down 5.6% to $5.7 billion.
Oilfield service companies also posted weaker earnings. Schlumberger fell 24.4% to $3.4 billion, Baker Hughes declined 13.3% to $2.6 billion, and Halliburton dropped 48.8% to $1.3 billion.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr