Their Combined Cash Generation Hit a Record $90 Billion, Surpassing Levels Seen After Russia's 2022 Invasion of Ukraine

Exxon Mobil, Chevron, BP, Shell and TotalEnergies — posted a combined $48 billion profit in Q2, benefiting from oil prices surging above $100 a barrel amid US-Iran hostilities. Their combined cash generation hit a record $90 billion, surpassing levels seen after Russia's 2022 invasion of Ukraine. The bumper profits also drew criticism from US President Donald Trump over high fuel prices.

The companies generated nearly $90 billion in cash during the quarter, the highest level on record and above the cash generated following Russia's full-scale invasion of Ukraine in early 2022. Much of the additional cash has gone towards building reserves and reducing debt, according to IEEFA's Williams-Derry to CNBC. Cash reserves across the five supermajors increased by a little over $17 billion from the previous quarter. Williams-Derry described the industry's financial approach as one that relies on periodic price spikes, such as those triggered by the Ukraine and Iran crises, to strengthen finances.

He said periods of high prices and fuel shortages provide financial relief after longer stretches of low and stable prices. CNBC reported that the companies were focusing on areas they can control during the Middle East conflict, including operational performance, trading and optimisation. BP CEO Meg O'Neill said the company was concentrating on reliability across its upstream assets, where it produces oil, as well as its refining operations.

She said BP had also changed the way its refineries were operating to maximise the availability of products most needed by consumers, including jet fuel and diesel. Shell CEO Wael Sawan described volatility as the new normal and said higher commodity prices had provided a strong tailwind for the company's results. The American Petroleum Institute, which represents about 600 drilling companies, refiners and other industry participants, said oil and gas is a cyclical business that should be assessed over decades rather than quarters.

It also opposed calls for a windfall tax on excess profits. The API said the industry was delivering record production and world-leading refining during one of the biggest global energy disruptions in decades, while continuing to invest in supply, infrastructure and resilience. On windfall taxes, the lobby group said such taxes would not lower consumer prices and could discourage the long-term investment needed to strengthen supply, infrastructure and energy resilience.

The duration of the supply disruption will be a key factor in determining where oil prices go from here. JPMorgan estimates that every additional month of disruption could add about $7 to $8 a barrel to Brent prices. If the disruption lasts three months, the bank expects average monthly Brent prices to reach around $114 a barrel.

Goldman Sachs has similarly warned that Brent could rise to $120 a barrel if shipping disruptions through the Strait of Hormuz, the world's most important oil transit route, continue. Its base case, however, remains that tensions in the Middle East will eventually ease. In that scenario, Goldman expects Brent to average $80 a barrel in the fourth quarter and $75 a barrel next year. It also cautioned that risks remain tilted to the upside due to the possibility of prolonged disruptions in the Strait of Hormuz and the Red Sea.