Firms that are generating billions from the Iran war

The closure of the Strait of Hormuz and it's global costly effects on the transportation of oil.

As society across the globe sees the high costs of the US-Iran war, some firms, such as BP , have

experienced major profits of approximately $3.24 billion. Whilst uncertainty has spread throughout

society, Iran’s closure of the Strait of Hormuz has significantly increased the cost of the transportation of

oil and therefore the cost of living for us consumers. This has led to individuals experiencing a decrease

in real disposable income due to a higher proportion of our income being spent on necessities, like oil,

and as a result, the economy experiences less consumption, which leads to less economic growth for

everyone. However, whilst the consumers of the economy struggle with petrol prices reaching the £2

mark, core businesses are much more profitable in conflicts and benefit significantly from the fluctuation

of energy prices.

Companies in Oil and Gas:

The surge in energy prices due to a supply-side shock has been the most influential economic impact yet. Ever since the Strait of Hormuz has been closed off, this has led to an extreme growth in price

movements.

According to Company Earnings, Shell’s profits have increased significantly, by almost double in revenue

from quarter 4 of 2024 to quarter 1 of 2026, to an incredible $6.4 billion generated. This clearly

demonstrates how oil and gas companies such as BP and Shell benefit significantly from supply-side

shocks caused by war and conflict. The closure of key trade routes – the Strait of Hormuz – and

disruption to global oil supplies shift the supply of oil to the left, increasing prices for oil and gas. Since

oil and gas are what we call 'necessities', we therefore say oil and gas have an inelastic demand, which

means that despite a price increase, the demand for oil and gas will stay relatively the same or decrease very slightly. This means that consumers have to pay this price, as they have no other relevant substitute; therefore, these companies benefit from higher turnover and profits shown in the diagram.

The impact on the international banks:

A lot of the world's biggest banks, such as JP Morgan, recorded a turnover of $11.6 billion again in the

first 3 months of 2026, making it the second-largest quarterly profit of all time. $47.7 billion was made in

profits by the Big Six banks, which is almost equivalent to the entire GDP of Nepal at $45.84 billion as of

today.

What opportunities are there for other energy sources?

This conflict has highlighted how we, as a society, need to be less dependent on fossil fuels and diversify

our energy sources toward other sources like solar and hydroelectric power. This war has led to

significant renewed investment being seen as more important for stability against supply-side shocks

such as this. For example, a Danish wind power company, Vestas, has reported high profits as demand

for renewables has increased drastically.

To summarise, society sees the horror of the US-Iran war and the enormous amount of finance used on

feulling the war, such as the $1.8 billion being spent per day in the US. Whereas big companies like Shell

and JP Morgan have only seen profits after profits. Should these companies contribute to the economy

when they are making such high profits compared to the struggles the average Briton faces?