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Economics can help.Oil companies made billions this quarter, they told investors on calls this week.ExxonMobil earned $15.4 billion, more than doubling its earnings compared to this time last year.Shell nearly doubled its own earnings, at $10.8 billion.Chevron's were up 180%, at $9.9 billion.Together, the three companies pulled in just over $36 billion this quarter.As with the soaring profits oil companies recorded last quarter, it's largely due to the war in Iran disrupting the global oil supply.
Less oil is moving through the Middle East, so the oil in other parts of the world has become much more valuable.Brent crude is now trading around $113 a barrel.For context, before the war began, it was about $70 a barrel.Meanwhile, demand for oil and refined products like gasoline, diesel and heating oil hasn't changed much.
People still need them to heat homes, drive cars, run tractors and truck everything we buy around the country.Dan Pickering, founder of the financial services firm Pickering Energy Partners, says that big oil companies are profiting as they meet that demand." The majors are able to sell their barrels that they produce in the U.S.
or Latin America or Europe for much higher prices," he said."So the Middle East's loss is generally the gain of oil and gas companies in the U.S.
and Europe."On their earnings calls, oil company executives said a good chunk of their profits were going to their shareholders through dividends and stock buybacks.Shell's buyback was one of their biggest ever.
Exxon announced its highest-ever quarterly dividend.But for the most part, Pickering says, these companies are in a wait-and-see stance — they're not really spending that money on things like new drilling projects, because they know they're in an unusual moment."This is a period where the high prices are driven more by geopolitical events than anything else," he said.Since it's hard to predict how lon...