War Windfall

BBC Business reported Thursday that while millions of households face rising costs from the US-Israel war in Iran, a handful of sectors are posting record earnings. Energy volatility and surging trading volumes have turned the conflict into a windfall for oil majors, Wall Street lenders and defence contractors.

Energy Prices Fuel Record Oil Earnings

The near-shutdown of traffic through the Strait of Hormuz since late February has convulsed global energy markets. Roughly one-fifth of the world’s oil and gas transits that chokepoint. BP saw its first-quarter profit more than double to $3.2 billion, crediting an exceptional run in its trading arm. Shell beat analyst forecasts with quarterly earnings of $6.92 billion. France’s TotalEnergies posted a near-third jump in profits to $5.4 billion over the same period. US majors ExxonMobil and Chevron reported year-on-year dips due to supply disruption, but both cleared analyst expectations. Both companies signalled further profit growth ahead as oil prices stay elevated against pre-war levels.

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Wall Street’s Trading Boom

Banks have been equally well positioned. JP Morgan’s trading division generated a record $11.6 billion in revenue in the first quarter of 2026, pushing the bank to its second-largest quarterly profit ever. Across the six biggest US lenders combined, first-quarter profits reached $47.7 billion. Investors rushed out of riskier assets and into perceived safe havens, driving volumes higher. Others bought market dips, fuelling a recovery rally that kept desks busy on both sides of the trade. Susannah Streeter, chief investment strategist at Wealth Club, told BBC Business that investment banks Morgan Stanley and Goldman Sachs were among the standout beneficiaries of the volatility.

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Background: Defence Orders Hit Record Backlogs

Conflicts typically accelerate defence budgets, and this one is no different. Emily Sawicz, senior analyst at RSM UK, said the fighting has exposed gaps in air-defence capability across Europe and the United States. Governments are now racing to replenish stockpiles. BAE Systems flagged strong expected sales growth in a Thursday trading update, citing rising global security threats as a tailwind. Lockheed Martin, Boeing and Northrop Grumman each reported record order backlogs at the close of the first quarter. Defence share prices have pulled back from mid-March highs, however, amid valuation concerns after years of sharp gains.

Renewables Catch a Surprising Tailwind

The conflict has also accelerated interest in clean energy, Streeter said. The energy supply shock is pushing governments to reduce fossil-fuel dependence, she noted, boosting renewable investment even in the United States despite the current administration’s pro-drilling stance. Analysts see the dynamic as a structural shift rather than a short-term bounce.

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