Iran War Disrupts Gulf Energy: Profits Soar, Risks Mount

The US-Israel war with Iran, which erupted on February 28, is creating a contrasting landscape for American oil and gas corporations. On one hand, Brent crude prices have risen about 22% from $72 to $88 per barrel, delivering massive profits; on the other, their long-term investments in the Gulf region are increasingly vulnerable to Iranian attacks.

According to a report from early August, ExxonMobil and Chevron posted combined second-quarter profits of over $26.6 billion, buoyed by soaring energy prices after the Strait of Hormuz was closed. The strategic waterway once carried one-fifth of the world's oil and natural gas before the war and remains largely shut to commercial shipping, despite a recent Iran-Oman agreement on a temporary sea route. Iran has said it will fully reopen Hormuz only if the US fulfills commitments under an expired interim peace deal.

A Tale of Contrasting Profit and Risk

Rahul Choudhary, vice president of upstream research at Rystad Energy, said the conflict has reduced oil and gas output that US firms extract from the Gulf. Specifically, gas production is expected to fall about 40% and oil output by 30-35% this year compared with last year. Higher commodity prices have offset the immediate financial impact, but prolonged disruption could delay major projects and affect growth plans.

ExxonMobil and Chevron clearly illustrate this divergence. Chevron has limited exposure to Gulf supply disruptions, as the region accounts for only 5% of its global output. The company reported adjusted second-quarter profits of $12 billion, its highest in six years. In contrast, ExxonMobil has been hit harder. The closure of Hormuz and Iranian attacks on US-linked infrastructure have affected its operations in Qatar and the UAE, which together account for 20% of the group's global upstream supply. ExxonMobil's upstream earnings in the first half of 2026 fell about $1.3 billion compared with the same period in 2025 due to lower production, though this was offset by higher prices.

Gulf Bottlenecks Come into Focus

Although the Gulf energy system is dominated by state-owned companies like Saudi Aramco, ADNOC, and QatarEnergy, US firms still hold critical strategic positions through stakes in joint ventures, production contracts, and equipment supply.

ExxonMobil has the largest US commercial interest in the Gulf, as a longtime partner of Qatar in LNG and a shareholder in the Upper Zakum oil field (UAE). ConocoPhillips participates in Qatar's North Field expansion projects; Occidental Petroleum operates the Mukhaizna field in Oman and has stakes in UAE gas projects; Chevron operates the Wafra field in the Saudi-Kuwait Neutral Zone and is studying an oil pipeline route from Iraq to the Mediterranean to reduce reliance on Hormuz.

According to the conflict monitor ACLED, Iran and Iran-backed forces have carried out at least 172 attacks on civilian infrastructure across six Gulf Cooperation Council (GCC) states since the war began. Notably, energy facilities, power plants, and desalination units account for nearly half (48%) of these attacks. The UAE, Kuwait, and Bahrain have suffered the most successful strikes.

Targets have included Kuwait's Mina Abdullah and Mina al-Ahmadi refineries, the Bahrain Petroleum Company refinery, and ADNOC's al-Ruwais industrial zone and Habshan gas complex in the UAE. Saudi Aramco has also faced numerous attacks, most recently a drone strike on the Abqaiq complex on July 27, which processes more than 7 million barrels per day. In March, a drone attack near the SAMREF refinery (a Saudi Aramco-ExxonMobil joint venture) in Yanbu disrupted oil loading at a Red Sea port.

Qatar: LNG Hotspot and Severe Toll

Attacks on Qatar's LNG infrastructure – where ExxonMobil and ConocoPhillips hold significant stakes – have been especially damaging. Ras Laffan Industrial City, the world's largest LNG export hub, has been hit multiple times, at one point forcing a complete shutdown of the plant. In June, an explosion due to a "technical issue" at the Barzan gas project (in which ExxonMobil has a stake) killed at least 13 people.

Choudhary said ExxonMobil's LNG production from Qatar is expected to plunge from 13 million tonnes last year to about 4 million tonnes this year. ConocoPhillips output is also seen dropping from 2.5 million tonnes to 1 million tonnes. Repairing damaged LNG pipelines at Ras Laffan could take 3-5 years and cost around $3 billion. Delays to North Field expansion projects could also push back plans to boost supply. Additionally, the UAE's Shah gas project (Occidental has a 40% stake) and the Upper Zakum field (ExxonMobil holds 28%) have been affected by attacks and export route disruptions. In Iraq, the Sarsang oil field was hit by a drone strike in March and a storage blast in April.

Analysts warn these risks could threaten future plans. ExxonMobil's $10 billion Upper Zakum expansion and Qatar LNG project could be delayed, while ConocoPhillips remains exposed through its 42% stake in BP's Kirkuk operations in Iraq. Conversely, Chevron and Occidental are seen as less affected given their presence in more stable countries like Israel and Oman.

Oilfield Services and Uncertain Outlook

Major oilfield services firms such as SLB, Halliburton, and Baker Hughes are seeing mixed impacts. According to Chinmayi Teggi, an energy analyst at Rystad Energy, combined Middle East revenue for the "Big Three" in the second quarter fell 8-10% year-on-year due to higher logistics costs, supply chain disruptions, and project delays. However, high oil prices have lifted revenue in other regions, and a production recovery could drive growth into 2027.

US President Donald Trump has repeatedly warned Iran over restricting access to the Strait of Hormuz. But for companies with billions invested in the Gulf, the challenge is not just keeping goods flowing but also securing energy infrastructure – an increasingly central target of war.