Surging oil prices are expected to deliver a sharp boost to second-quarter earnings for major US energy companies, but the windfall is also raising political pressure on the White House as higher gasoline prices become a key issue ahead of November's midterm elections.
Higher crude prices are supporting revenue and profit expectations for major producers including ExxonMobil, Chevron and ConocoPhillips, but they are also driving up fuel costs for American consumers.
The contrasting impact is forcing President Donald Trump's administration to balance a strong energy sector against its efforts to contain inflation and keep gasoline prices in check.
- Oil rally strengthens second-quarter earnings outlook
According to estimates compiled by the London Stock Exchange Group (LSEG), ExxonMobil is expected to report second-quarter net income of $15.7 billion, supported by elevated crude prices during the US-Israel-Iran conflict and stronger refining margins. The figure would be nearly three times the company's first-quarter profit.
Chevron is projected to post net income of $9.9 billion, more than triple its first-quarter earnings, while analysts also expect ConocoPhillips to report stronger profitability, supported by solid production performance.
Oilfield service companies are likewise expected to post improved results, benefiting from stronger margins and increased investment activity. Analysts say SLB could be among the biggest beneficiaries of a new investment cycle driven by growth in digital technologies and data center infrastructure, while Halliburton may benefit from tightening service capacity in North America.
- Higher gasoline prices become political challenge
As crude prices filter through to retail fuel markets, gasoline prices are adding pressure to household budgets across the US.
The trend is creating political challenges ahead of November's midterm elections and has renewed attention on Trump's repeated calls for lower oil and gasoline prices.
On June 24, Trump said declines in crude oil prices had not been fully reflected at the pump and instructed the US Justice Department to examine the issue.
Arguing that major oil companies had failed to pass lower crude costs on to consumers, Trump said Americans continued to pay unnecessarily high fuel prices and that gasoline prices should decline more rapidly.
The comments came months before elections that will determine control of Congress, even as geopolitical tensions and tighter sanctions on Iran continued to support oil prices. Brent crude, however, remains well below the levels recorded in April and May.
- "US presidents cannot afford high gasoline prices during elections"
Osama Rizvi, energy and economics analyst at US-based Primary Vision Network, told Anadolu that current market conditions could reasonably be described as generating “war-driven profits” and that 2026 has been a highly favorable year for the oil sector.
At the same time, he said consumers have borne the cost, pointing to weakening employment trends and historically low consumer confidence levels in the US economy.
With November's midterm elections approaching, elevated gasoline prices pose a political risk for Trump and Republicans, Rizvi said.
“US presidents are aware that, in an election year, they cannot afford two things: high gasoline prices and body bags. The latter speaks to the reality of whether Trump will invade Iran, while the former reflects how long the US can sustain hostilities,” Rizvi said.
“Inventories are running low, while the products market is facing shortages, with crack spreads reaching multi-year highs,” he added.
- White House-energy sector ties remain strong despite public tensions
Independent oil market analyst Gaurav Sharma said fears at the start of the US/Israel-Iran conflict that oil prices could surge to $175-$200 per barrel failed to materialize largely because of strong US supply.
“Oil prices above $100 a barrel directly benefited US companies as Asian buyers queued up to purchase US light sweet crude,” Sharma said.
Sharma said Trump is likely to step up pressure on energy companies if fuel prices remain high ahead of the US midterm elections. However, he noted that both markets and producers can only respond to prevailing economic conditions, suggesting friction between the White House and the industry is likely to persist as Trump continues to position himself as a champion of consumers.
On the other hand, despite the public rhetoric, Sharma said relations between the White House and the US energy sector remain exceptionally strong.
“Behind the scenes, relations between the White House and the US energy sector have never been better,” he said. “The US is well positioned as a major oil exporter and the world's leading LNG exporter. The country is also embarking on its largest energy expansion in a generation.”
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
