Iran war windfall puts Big Oil on collision course with Trump

{"text":[[{"start":9.3,"text":"America’s Big Oil groups are set to post record profits stemming from Donald Trump’s Iran war, setting them on a collision course with the US president, who has accused companies of price gouging at the pump. "}],[{"start":22.450000000000003,"text":"ExxonMobil and Chevron are expected to announce second-quarter net income of $15bn and $9.7bn, respectively, later this month — more than three times the previous quarter — as high crude, diesel and jet fuel prices trigger a wartime windfall."}],[{"start":40.150000000000006,"text":"American refiner Marathon is expected to join the supermajors in posting its highest profits since 2022, when Russia’s full-scale invasion of Ukraine helped set off a global inflationary spiral, according to forecasts compiled by FactSet. Valero, another refiner, is also in line to report a bumper quarter."}],[{"start":60.45,"text":"The Big Oil profit gusher would spark a reaction in Washington, where Trump has already accused companies of profiteering just months ahead of the US’s midterm elections, said analysts."}],[{"start":71.5,"text":"“Investors will see returns, governments will see red,” said Kevin Book at ClearView Energy Partners. “The administration is clearly eager for some sort of fuel price relief ahead of the election but the industry did not cause prices to rise, the war did.”"}],[{"start":87.4,"text":"The average US petrol price is up almost a quarter compared to a year ago, to $3.8 per gallon, while diesel is 30 per cent higher at $4.8 per gallon, according to motoring group AAA. "}],[{"start":100.60000000000001,"text":"Trump last month ordered a Department of Justice probe into energy companies over price gouging, a tactic that was also employed by then- president Joe Biden when prices surged after Russia’s full-scale invasion of Ukraine. "}],[{"start":112.95,"text":"“Gasoline Retailers must get ​their Prices down, IMMEDIATELY,” Trump wrote on his Truth ​Social platform. “If Retailers don’t do this, big problems lie ​ahead!”"}],[{"start":122.4,"text":"Democrats have also gone on the attack against oil companies. Senators Elizabeth Warren and Sheldon Whitehouse wrote to industry leaders last month, saying “American families are paying egregiously high prices at the pump while the fossil fuel industry collects massive windfall profits thanks to the Trump Administration’s war in Iran”. They demanded oil companies provide documentation of their pricing decisions and communications with the White House."}],[{"start":146.05,"text":"The conflict created one of the largest oil supply disruptions in history after Iran largely closed the Strait of Hormuz, shutting in Gulf exports accounting for almost 20 per cent of global demand, sending fuel prices sharply higher. "}],[{"start":159.55,"text":"US companies have capitalised on the supply shortfall by exporting record volumes of oil and refined products as crude prices soared to more than $100 a barrel after Trump launched the war earlier this year."}],[{"start":172.65,"text":"Big shale producers including ConocoPhillips and Occidental Petroleum are also poised to post a profit surge thanks to the crude price rally, although most have resisted calls from the administration to launch costly new drilling sprees."}],[{"start":187.85,"text":"Crude prices had fallen in recent weeks on hopes for a peace deal with Iran but rallied sharply to about $80 per barrel on Wednesday after the US launched a second day of strikes on the Islamic republic and Trump said a weeks-long ceasefire was “over”."}],[{"start":null,"text":"

"}],[{"start":204.35,"text":"Months of higher petrol prices have been painful for Americans — and a growing threat to Trump’s Republicans as they fight to keep control of both chambers of the US Congress."}],[{"start":215,"text":"The fuel inflation has reverberated through the US economy as rising transportation costs drive up prices for everything from plane tickets to groceries. "}],[{"start":224.5,"text":"Many Americans have grown frustrated with the president over the price surge. An FT poll last week found 58 per cent of voters believed the war had not been worth the cost."}],[{"start":235.4,"text":"“What I would say is, we’re all concerned about prices. So, there is a lot of empathy, whether it’s in the US or here in the UK or in Europe for consumers,” Eimear Bonner, Chevron’s chief financial officer, said in June. "}],[{"start":249.85,"text":"“It’s going to take time though. There is a lag between, you know, oil prices and reductions in oil prices and when that shows up at the pump.”"}],[{"start":258.3,"text":"Trump has told reporters petrol should be at $2.25 a gallon — a level last reached in 2020 when demand collapsed during the Covid-19 pandemic."}],[{"start":268.5,"text":"The White House declined to comment on the oil companies’ impending windfall and referred a request for details on the price-gouging probe to the Department of Justice. The DoJ declined to comment, citing “ongoing investigations”. "}],[{"start":282.25,"text":"None of the oil companies responded to a request for comment about their forecast profit haul. "}],[{"start":287.85,"text":"Fuel prices are expected to stay elevated for as long as there is uncertainty around the Strait of Hormuz, one of the world’s most important shipping routes."}],[{"start":296.65000000000003,"text":"Even if supplies from the Gulf keep rising, the oil would take time to work its way into refined products markets and bring down prices for petrol, diesel and other fuels, said experts. "}],[{"start":308.75000000000006,"text":"“There is this huge disparity between refined product prices and crude prices,” said Carl Larry, an analyst at energy consultancy Enverus. "}],[{"start":317.30000000000007,"text":"“The crux here is that refining capacity is limited, whereas crude production, even in these times, almost seems unlimited,” he said. “There’s going to be a sustained level of higher prices for products.”"}],[{"start":329.8500000000001,"text":"Further pressure on global fuel supplies is coming from Russia, which has banned exports of diesel after Ukrainian drone attacks on its refineries triggered the country’s worst fuel crisis since the collapse of the Soviet Union."}],[{"start":342.75000000000006,"text":"Russia is the world’s second-largest diesel exporter, supplying Brazil, Turkey and the Middle East after Europe shunned its products following the Ukraine invasion. "}],[{"start":352.75000000000006,"text":"Tighter global diesel supplies could buoy future profits for Big Oil groups that make the fuel, which is crucial to industry and agriculture. "}],[{"start":361.20000000000005,"text":"“It’s a volatile situation, with volatility comes a premium on price,” said Ed Hirs, an energy fellow at the University of Houston. “Uncertainty costs money.” "}],[{"start":371.45000000000005,"text":"Additional reporting by Ella Lee in Washington"}],[{"start":381.50000000000006,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1783581247_2327.mp3"}