US and EU Governments Target Oil Majors Amid War-Driven Profit Surge

Geopolitical tensions between the United States, Israel, and Iran have triggered a sharp rise in global energy prices, prompting immediate political scrutiny of major oil companies. US President Donald Trump has accused fuel retailers of price gouging and directed the Department of Justice to launch a federal investigation into the disparity between falling crude costs and high pump prices. Simultaneously, members of the European Parliament’s Green Party have called on fossil fuel firms to fund climate resilience measures, including making public infrastructure heatwave-proof.

The price shock intensified after US and Israeli strikes on Iran led Tehran to shut traffic through the Strait of Hormuz, a critical global energy supply node. This disruption caused Brent crude to exceed $100 per barrel. While oil prices have since moderated, with Trump noting crude had dropped to $68 a barrel, retail gasoline prices in the United States remained elevated, topping $4 per gallon and raising concerns about potential recession risks.

In a post on TruthSocial, Trump instructed the Department of Justice to investigate price gouging, urging retailers to target a price of $2.50 per gallon. He criticised the industry for not passing on lower crude costs to consumers, stating that customers were being gouged. The oil industry has countered that it does not hold full price-setting power at the pump, noting that retail prices are linked to international crude benchmarks but do not move in perfect sync.

Analyst estimates indicate that supermajors Exxon and Chevron are poised to report significantly higher profits for the second quarter. Citing data from LSEG and reports from Reuters and the Financial Times, Exxon is expected to book adjusted net income between $15.9 billion and $19 billion, while Chevron’s earnings are estimated at nearly $9.7 billion to $10 billion. These figures represent more than three times the profits reported in the first quarter.

Refiners are also expected to see strong results, with Marathon projected to report its highest profits in four years and Valero set to deliver a robust quarter. An Energy Intelligence column highlighted that Ukrainian drone attacks on Russian refineries have squeezed diesel and jet fuel supplies, prompting US refiners to boost production of those fuels at the expense of gasoline, thereby contributing to higher gasoline prices.

Kevin Book, managing director of ClearView Energy Partners, told the Financial Times that while investors will see returns, governments are facing political pressure. He noted that the administration is eager for fuel price relief ahead of the election, but the industry did not cause prices to rise; the war did. In Europe, Green Party MEPs have demanded that the five largest fossil fuel companies foot the bill for climate adaptation, accusing the sector of enriching itself on climate destruction.