If crude oil prices remain at the elevated levels seen since the outbreak of the US-Israel-Iran conflict, American petroleum companies could realize over $60 billion in unexpected profits this year. According to models from investment bank Jefferies, since the conflict began on February 28th, which spurred an approximately 47% rise in oil prices, US producers alone will generate an additional $5 billion in cash flow this month. Energy research firm Rystad estimates that if the average annual price for US crude reaches $100 per barrel, companies would gain an extra $63.4 billion in revenue from oil production.

Last week, Brent crude surpassed $100 per barrel. Former US President Donald Trump stated on social media, "The US is the world's largest oil producer, by far, and higher oil prices mean we are making a fortune." The US benchmark WTI crude also exceeded $100 per barrel on Monday.

The increased cash flow primarily benefits US shale oil firms with limited exposure to the Middle East. However, the situation is more complex for the world's five major oil giants—Exxon Mobil, Chevron, and their European counterparts BP, Shell, and TotalEnergies—which have extensive operations in the Gulf region and are more significantly impacted by potential closures of the Strait of Hormuz.

Multiple facilities partly owned by these majors have already halted production. Shell has declared force majeure on liquefied natural gas (LNG) cargoes from QatarEnergy's Ras Laffan facility. SLB, the world's largest oilfield services company, issued a profit warning last Thursday, highlighting operational challenges in the region.

Martin Houston, Chairman of Omega Oil and Gas and an oil and gas industry veteran, commented, "There are no winners in this crisis; international oil companies are certainly not beneficiaries. They would prefer a return to the situation two weeks ago rather than facing a crisis that causes a short-term price spike." He added, "National oil companies in the Middle East and their partners need to rebuild damaged facilities, but the real concern is... an unprecedented closure of the Strait of Hormuz, even if brief."

Hope for a swift resolution appears slim. Iran's new Supreme Leader, Mojtaba Khamenei, stated last Thursday that the Iranian military would continue blocking this narrow waterway, which carries one-fifth of the world's oil and gas shipments, to pressure the US and Israel. Analysis from Goldman Sachs indicates that of the strait's normal daily flow of 20 million barrels of oil, approximately 18 million barrels remain blocked. The impact on the LNG industry is more severe, with about one-fifth of global production capacity offline.

RBC Capital Markets predicted last Friday that the conflict could persist into the spring, with Brent crude potentially exceeding $128 per barrel within 3-4 weeks. According to Rystad analyst Thomas Liles, "A closure of the strait would severely impact Middle Eastern national oil companies. Western oil majors—which derive about 20% of global upstream production from Qatar, the UAE, Iraq, and the Saudi-Kuwaiti Neutral Zone—would also suffer significant effects."

Rystad data shows that BP and Exxon Mobil have the largest Middle East exposure, with over one-fifth of their global oil and gas free cash flow projected to come from the region by 2026. The figures for TotalEnergies, Shell, and Chevron are 14%, 13%, and 5%, respectively. Recently, these majors have been expanding their Middle East presence, signing agreements in countries like Syria and Libya to increase reserves and production.

TotalEnergies stated in a trading update last Friday that higher oil prices would be sufficient to offset production losses in the Middle East. Exxon Mobil CEO Darren Woods previously told the Financial Times that the company is adapting to the shutdown of a "core global supply source," but this would impact the entire industry. He noted, "Our scale and size provide some advantage in reallocating resources... we are optimizing operations."

Analysts suggest that Exxon Mobil's Middle East exposure is one reason its stock performance has lagged behind peers: since the crisis began, its share price has risen only 2% to $156.12. In the same period, BP and Shell shares surged 11% and 9%, respectively, reflecting investor belief that the European majors' trading divisions would benefit from oil and gas price volatility.

Christopher Kuplent, an analyst at Bank of America, stated, "Stock prices reflect more than just the next quarter or two." He pointed out that markets expect oil prices to "retreat to $75 per barrel within months, not years." Equinor's share price has outperformed other Western majors due to its lack of Middle East operations. Furthermore, as a major European gas supplier, it benefits from soaring European gas prices following QatarEnergy's suspension of LNG shipments.

Refiners like Neste and Repsol have seen strong stock performance following disruptions to Middle Eastern refined product supplies. Mr. Liles remarked, "Companies with less exposure to the Middle East will all benefit from high oil prices."

Paul Sankey, founder of Sankey Research, believes the Middle East crisis will push countries to more actively develop domestic energy sources to avoid supply disruptions and price spikes. "This could evolve into a demand destruction event where ultimately everyone loses," he noted, suggesting heavily impacted Asian nations might reconsider their stance on nuclear power. "The market views the unprecedented closure of the Strait of Hormuz as an anomaly, but oil historians may see it as marking a structural shift in oil risk."