Updated August 1, 2026 at 8:38 AM MDT
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Chevron just announced its highest quarterly earnings ever. Shell clocked its second-highest quarterly profits. And while ExxonMobil's profits came in beneath what Wall Street analysts had expected, it still managed to double its earnings compared with this time last year.
Combined, the three companies raked in, on average, some $404 million in profits every day for the last three months.
It's a bonanza for those companies (and for their executives). And it's raising eyebrows and ire among some European lawmakers and Democrats in the U.S. Congress, who are calling for windfall taxes on those companies.
Conflict has raised global crude prices and refining margins
The war with Iran has effectively shuttered the Strait of Hormuz, choking off a crucial waterway for crude oil exports. (On Thursday, only five ships were confirmed to have transited the strait, according to the trade intelligence group Kpler.) Some oil from the Persian Gulf is reaching the market through other routes, although new threats are putting pressure on some of those alternatives.
The conflict in the Middle East has also blocked exports of refined fuels, like gasoline, jet fuel and diesel. Meanwhile, Ukraine's attacks on Russia's oil-refining infrastructure have worsened the world's shortage of those fuels.
The world's oil consumers have felt the result: higher prices for fuel and, in turn, higher prices for everything else.
The world's oil producers have felt it too — in higher margins for the crude oil and refined fuels that they sell.
Exxon clocked $14.5 billion in profits this quarter; Chevron, $12.1 billion; and Shell $9.8 billion.
Those profits came even though Exxon and Shell, in particular, suffered substantial disruption to their operations in the Middle East, which have been directly affected by the war.
Higher crude prices and refining margins were enough to more than offset the blow.
Windfall taxes
In the U.S., Sen. Sheldon Whitehouse, D-R.I., has proposed a windfall tax on oil profits; several countries in Europe are also calling for such a tax. (The United Kingdom already has one in place.) Such a tax is designed to harvest "excess" profits that a company rakes in because of outside forces, not because of innovation or outperformance, and it often redirects that money toward the consumers who are having to pay elevated prices for energy.
The European Union imposed a windfall tax on oil profits after prices spiked in 2022 following Russia's full-scale invasion of Ukraine.
In an earnings call on Friday, ExxonMobil CEO Darren Woods told analysts that windfall taxes are a "misguided policy" that penalizes businesses that attempt to be successful despite the oil industry's volatile booms and busts.
"We canceled investments that we had planned for Europe based on the last time they passed a windfall profits tax," he said. "And in fact we're suing because we don't think that's a legal taking for the industry."
Paying down debt and eyeing long-term growth
Executives don't know exactly how long oil will remain scarce and profits will be high. "I can't predict when things in the Strait [of Hormuz] will settle down and we'll start to see those flows again," Chevron CEO Mike Wirth told analysts on the company's earnings call Friday.
But they don't expect this money train to last forever. Woods, of Exxon, told analysts repeatedly that oil from the Middle East is simply too important to the global economy for the current situation to persist.
"I think, ultimately, there's a solution that the world will arrive at," he said. "I couldn't tell you exactly when or what it's going to look like, but those resources are just too critical to the overall economic health of the world for them to stay offline."
That's one reason — among others — that companies aren't racing to start a bunch of new expensive drilling projects to meet the world's current oil appetite. They expect the imbalance to be temporary.
Instead of pouring this cash into new production — or spitting it out to shareholders in fatter-than-expected dividends and stock buybacks — so far, the big oil companies seem more focused on paying down debt and strengthening their own financial situations.
And instead of targeting short-term drilling projects, they're talking about long-term, disciplined growth in new oil fields over decades.
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