Who will be the winners as international oil prices rise? Foreign media: U.S. oil companies "directly benefit," while multinational oil firms hope to return to stability.

How American shale oil companies are uniquely benefiting from the Gulf conflict?

(Global Times reporter Yang Shuyu, Global Times special correspondent in the U.S. Feng Yarin) As the fires of conflict continue in the Gulf region, a severe shake-up in the global energy market is unfolding. According to a report by the Financial Times on the 15th, with shipping through the Strait of Hormuz disrupted, oil and gas facilities attacked, and supply chains strained, international oil prices have quickly surged. Analysts point out that if oil prices remain around $100 per barrel, U.S. oil producers may gain over $63 billion in additional revenues this year, becoming one of the most direct beneficiaries amid global energy turmoil.

March 13, a refinery in Texas, USA. (Visual China)

Oil companies’ stock prices reach new highs

The Financial Times reports that a model from investment bank Jefferies shows that since the outbreak of conflict between the U.S. and Iran on February 28, international oil prices have cumulatively risen by about 47%. Just in March, U.S. oil producers could see an increase of about $5 billion in cash flow as a result. Energy research firm Rystad Energy further estimates that if this year’s crude oil prices average around $100 per barrel, U.S. oil companies will gain approximately $63.4 billion in additional revenues from production. Last Friday, West Texas Intermediate crude closed at $98.71 per barrel. On the 12th, when Brent crude surged above $100, U.S. President Trump stated on social media: “As the world’s largest oil producer, rising oil prices mean America is making big money.”

The latest report from the Guardian points out that the energy supply shock triggered by the situation in Iran has pushed the stock prices of major global oil companies to historic highs. Data shows that in the two weeks following the U.S.-Israel attacks, the total market value of the six major Western oil companies increased by over $130 billion. Even with some production facilities damaged, the industry is still expected to gain billions in excess profits. Currently, the stock market valuations of Shell, ExxonMobil, and Chevron have all set historical records. ExxonMobil’s market value has increased by nearly 30% this year, reaching a new high of $643 billion. Chevron’s market value has also risen by over 30%, nearing $400 billion. Western oil companies that previously performed poorly have seen their market values increase by nearly 40% this year.

Despite rising international oil prices, the situations of oil giants vary. The Financial Times believes that the primary beneficiaries of this extra cash flow are U.S. shale oil companies, which are focused on domestic operations and have less exposure to Middle Eastern risks. “Our supply has no bottlenecks,” quoted oil forecasting expert and founder of Pickering Energy Partners Dan Pickering in a report by Fortune magazine on the 13th, “U.S. energy producers’ financial performance will definitely benefit from this conflict.” In contrast, large European multinational oil companies find themselves in a much more awkward position. BP, Shell, and TotalEnergies all have substantial assets in the Gulf region and are far more affected by the impacts of the blockade of the Strait of Hormuz.

U.S. energy states reap “unexpected windfalls”

“The conflict in the Gulf region is driving up oil prices, which may disrupt the global economy, but for some U.S. states with energy industries, this is an unexpected windfall.” A report by the Wall Street Journal on the 15th stated that unlike past oil crises, the U.S. is now a major global oil producer, which protects its economy from the most severe impacts of war. With rising oil prices, restaurants and hotels in some U.S. energy states are full, the construction industry is booming, and retail consumption is also increasing. Hobbs, New Mexico Mayor Jonathan Sena stated regarding rising oil prices: “Oil and gas are the cornerstone of our economy. Rising energy prices mean more jobs and more opportunities for us.”

The U.S. Energy Information Administration expects that by 2026, U.S. average daily oil production will reach 13.6 million barrels, roughly unchanged from last year, with an additional increase of 200,000 barrels/day by 2027. Economists from the University of New Mexico analyze that if international oil prices rise by an average of $1 per barrel for the remainder of this year, the state’s annual revenue will increase by about $89 million. According to forecasts from U.S. Energy Information Administration analysts, the average international oil price from March to the end of this year will be about $76 per barrel, while the price in 2025 is expected to average about $65 per barrel. This $11 increase will bring hundreds of millions of dollars in additional revenue to energy states like New Mexico.

Winners or mutually destructive outcomes?

Although U.S. oil companies are generally seen as benefiting significantly from the Gulf conflict, there are also many voices arguing that the tumultuous market will ultimately impact the U.S. energy industry. Paul Sankey, founder of independent energy research and consulting firm Sankey Research, stated that after the conflict in the Gulf region subsides, major global energy-consuming countries will more actively turn to domestic energy and new energy sources to avoid the risks of energy supply disruptions and price surges, “which could evolve into a mutually destructive outcome of ‘energy demand destruction’.” Sankey analyzes this.

The Wall Street Journal noted that over the past decade, the U.S. oil industry has been trying to break the long-standing boom-and-bust cycle that has plagued its development. While a short-term rise in oil prices above $100 per barrel is beneficial for producers, such price levels will harm consumer interests in the long run, prompting them to reduce fuel consumption, which in turn could lead to a sharp drop in crude oil prices. At that point, producers would have to cut production, reduce costs, and lay off workers. Investors are also pressuring producers to control spending and not blindly chase high oil prices. U.S. Secretary of the Interior Deb Haaland recently stated in an interview with CNBC that she had met with some U.S. energy companies and expects them to announce increased production to respond to rising oil prices. However, industry executives indicate that the increase in U.S. domestic oil and gas production is very limited and cannot replace the loss of about 9 to 10 million barrels per day due to the closure of the Strait of Hormuz.

Martin Houston, chairman of Australia’s Omega Oil and Gas, candidly stated: “There are no winners in this crisis, and multinational oil companies are the victims. Compared to the short-term windfall from high oil prices, they would prefer to return to the stable situation of two weeks ago.”