War Profits — The Sectors Cashing In on the Iran Conflict
BBC Business reported Friday that while households worldwide absorb rising costs from the US-Israel war in Iran, a handful of industries are posting record earnings from the same conflict.
The effective shutdown of the Strait of Hormuz since late February has thrown global energy markets into turmoil. Roughly a fifth of the world’s oil and gas typically transits that chokepoint.
Big Oil Leads the Profit Surge
European majors with active trading desks have gained most from violent price swings. BP’s first-quarter profit more than doubled to $3.2 billion, driven by what the company called exceptional trading performance. Shell beat analyst forecasts with quarterly earnings of $6.92 billion. TotalEnergies logged a near one-third jump in profits to $5.4 billion over the same period.
US giants ExxonMobil and Chevron posted year-on-year earnings declines due to supply disruptions. Both firms nonetheless beat expectations and expect further growth as oil prices remain elevated against pre-war levels.
Wall Street Books Its Own Windfall
Iran war profits have extended well beyond the energy patch. JP Morgan’s trading division generated a record $11.6 billion in first-quarter revenue, lifting the bank to its second-largest quarterly profit ever. Across the six biggest US lenders — including Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo — combined quarterly profits reached $47.7 billion.
Susannah Streeter, chief investment strategist at Wealth Club, told the BBC that heavy trading volumes had particularly benefited Goldman Sachs and Morgan Stanley. She noted that fears of escalation pushed some investors to sell equities, while others bought into the dip, creating a two-way surge in activity that fattened trading desks on both sides.
Background — Why Wars Move Markets
Conflict-driven commodity shocks have historically delivered outsized returns to energy traders and large financial institutions with diversified revenue streams. The 1973 oil embargo and the 1990 Gulf War each produced comparable profit spikes for oil majors and banks positioned to trade volatility.
Defence Orders Pile Up, Renewables Get a Rethink
The conflict has meanwhile swelled order books at major arms makers. BAE Systems forecast strong sales growth in a Thursday trading update, citing rising government defence budgets globally. Lockheed Martin, Boeing and Northrop Grumman each reported record backlogs at the close of the first quarter. Defence shares have retreated from March highs on valuation concerns, however.
The war is also accelerating renewable energy investment. Streeter said energy-security fears have supercharged interest in the sector, even in the US, where the current administration has prioritised fossil fuel expansion.
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