Major Western oil companies have reported strong third-quarter profits amid elevated energy prices linked to ongoing geopolitical tensions in the Middle East, but many are maintaining cautious spending strategies due to uncertainty about the sector’s long-term prospects.
BP, Chevron, Exxon Mobil, Shell, and TotalEnergies together posted combined net earnings of $56 billion for the July-September period. BP recorded its highest-ever quarterly profit of $8.5 billion, largely driven by a tenfold increase in refining earnings compared to the previous year. For several of the other oil majors, the quarter marked their second-best performance on record, trailing only the exceptional profits seen following Russia’s invasion of Ukraine in early 2022.
The surge in earnings coincides with significant price increases since the Iran conflict began on February 28. Brent crude has risen roughly 60% to about $114 per barrel, while European natural gas benchmarks have climbed to levels not seen since late 2022. Diesel prices also remain elevated, near September’s historic peak exceeding $200 per barrel, amid ongoing refinery outages and disrupted trade routes.
Despite these favorable market conditions, the leading energy firms have generally refrained from large-scale capital expenditures. Industry executives point to persistent concerns over future demand and supply dynamics, which dampen enthusiasm for major new investments. At the start of 2026, many companies had anticipated a potential oversupply of oil and liquefied natural gas later this decade, prompting widespread reductions in spending, hiring freezes, and cost-cutting initiatives.
The short-term landscape changed dramatically with joint US-Israeli strikes on Iran and the extended closure of the Strait of Hormuz, which curtailed Gulf exports and tightened refining capacity. However, this shift has not altered the majors’ prudent approach. Instead of accelerating project development, they have prioritized strengthening balance sheets and enhancing shareholder returns.
The combined net debt of these firms fell to $117 billion in the third quarter from $204 billion in the first quarter of the year. BP, which carried one of the heaviest debt loads among its peers entering 2026, nearly halved its net debt to $13.9 billion compared to a year earlier. BP’s CEO emphasized ongoing commitment to debt reduction as a key focus.
Share repurchases rose modestly to $12.3 billion in the third quarter, consistent with the previous quarter. Shell and TotalEnergies have announced plans to significantly increase buybacks over the coming three months. Exxon Mobil aims to repurchase $20 billion of shares in 2027, similar to this year’s level.
The cautious capital discipline reflects a broader industry skepticism regarding the sustainability of current high prices and the sector’s long-term outlook, despite the immediate financial windfall from elevated crude and gas prices amid geopolitical uncertainty.