U.S. Oil Companies Expected to Earn Up to $6 Billion This Year Amid High Oil Prices

Shale Oil Companies Most Advantageous Due to Limited Impact from Middle East Conflict

Global Oil Majors Also Face Inevitable Setbacks

Shale oil production scene. Photo by Bloomberg

The Financial Times (FT) reported on March 15 (local time) that, as international oil prices have surged following U.S. and Israeli airstrikes on Iran, U.S. oil companies are expected to post profits exceeding $6 billion (approximately 9.24 trillion won) this year.

According to modeling by investment bank Jefferies, U.S. oil producers are estimated to generate an additional cash flow of $5 billion (7.33 trillion won) just this month. Jefferies explained that this is due to international oil prices rising by about 47% since the outbreak of the Iran war on February 28.

Energy market research firm Rystad also projected that if the upward trend in international oil prices continues this year and the average price reaches $100 per barrel, oil companies could earn an additional profit of $6.34 billion (approximately 9.29 trillion won) thanks to increased crude oil production.

In particular, U.S. shale oil companies are considered to be in the most advantageous position. While oil prices are rising, they remain relatively unaffected by production disruptions resulting from the closure of the Strait of Hormuz.

On the other hand, the situation is not so straightforward for global oil giants. Companies such as ExxonMobil, Chevron, BP of the United Kingdom, Shell, and TotalEnergies of France possess extensive assets in the Middle East, making them directly vulnerable to the impact of the Strait of Hormuz closure.

Some production facilities in which the five major oil and gas companies hold stakes have been shut down. As a result, Shell declared force majeure on liquefied natural gas (LNG) shipments that were scheduled to be loaded at QatarEnergy's Ras Laffan plant. SLB, the world's largest oilfield services company formerly known as Schlumberger, also announced the possibility of a downward revision in its results.

Martin Houston, Chairman of Omega Oil and Gas, stated, "There are no winners in this situation," and added, "International oil companies, in particular, would have preferred the circumstances from two weeks ago to persist, rather than a crisis that temporarily drives up oil prices."

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