The profits posted by the supermajors so far this year have been nothing short of spectacular. That’s because a year in which many thought the market would see an oil surplus registered a seismic supply shock caused by the Iran war, elevated prices, and a pivot back to traditional energy supported by new-age technologies.
But first, a word on those profits. Bearish calls and predictions of an oil glut were kicked into the long grass after the US and Israel attacked Iran on 28 February. Subsequent developments saw the oil price rise by over 46% in the year to 12 June, using Brent as a benchmark.
With Brent largely trading on news signals, rising as high as $110 per barrel and falling to $85, only to rise and fall again, the supply-side crisis that gripped the global market saw the supermajors gain from the volatility.
Bumper numbers
In a sense, European oil and gas majors, with their huge trading operations, may be considered the primary beneficiaries led by the three largest among them — Shell, bp, and TotalEnergies.
These companies do not typically publish the performance of their trading arms separately from headline profits. But that overall performance has been pretty telling this year. TotalEnergies saw its first-quarter earnings rise by 30%, bp saw its earnings more than double, and Shell saw a 24% uptick.
Meanwhile, US majors like Chevron and ExxonMobil saw their profits fall in the corresponding quarter of 2025 due to disruptions in the Strait of Hormuz. However, they comfortably beat analyst expectations for the quarter, with hopes of much better performance as the year progresses.
That’s because even if peace prevails imminently, it will take the better part of six months for the oil market to normalise, given the scale of the outages, infrastructural damage, and disruption to energy cargo transits.
Defensive deployment of petrodollars
It is unsurprising that many majors have embarked on investing those extra petrodollars. The investment mix, though, is intriguing and comes across as an exercise in defensive capital deployment at a time of extreme cyclical volatility in the market.
Their pivot back to traditional energy appears to be a recurring theme. That quest entails seeking the next big play. For many, if not most supermajors, such a play happens to US shale in general and the country’s Permian basin in particular.
The US is now firmly part of the plan to invest more, not less, in global exploration, as Chevron CEO Mike Wirth put it. Speaking at the recently concluded Bloomberg Energy Security Executive Briefing in Houston, Wirth said: “I do think you’ll see this country [US] and this hemisphere become a more important part of the global energy system. The US and the Americas are very well set up with strong energy resources and a lot of access to blue-water ports.”
Accompanying this investment in global exploration is capital spending on US liquefied natural gas infrastructure and terminals stateside. The US Energy Information Administration projects the country’s LNG exports to rise to 17.2 Bcfd in 2026, up from 15.1 Bcfd.
Supermajors wanting a way into these plays have amplified their presence either via buy or build strategies, though TotalEnergies leads the pack in terms of equity investments.
Overall, despite higher oil prices, the International Energy Agency’s outlook suggests capital outlays on hydrocarbons are expected to rise by a mere 3% in 2026, driven mainly by investment in natural gas projects.
The IEA also expects net refinery capacity to grow, reflecting a slowdown in closures this year. But new refinery investment is expected to fall to “decade-level lows.”
Tech investments for a new geopolitical reality
As the majors continue to grapple with targeted investment in hydrocarbon exploration and infrastructure, they are also unmistakably utilising their recent windfall to invest in technology along two pathways.
The first entails investing in technologies such as industrial artificial intelligence, machine learning, and advanced analytics to optimise operations, such as refineries, and improve margins, especially on jet fuel.
The second involves attuning their venture capital strategies to adapt to new geopolitical realities in the wake of the Iran war via efficiency technologies. On the other hand, according to Bloomberg NEF, the majors slashed low-carbon spending by 65% in 2025.
That trend will likely accelerate, with the venture arms of the majors, from Chevron Technology Ventures to Shell Ventures, visibly shifting their focus to startups specialising in robotics, automation and advanced subsurface imaging. Come the end of the year, it appears that investment by supermajors in process efficiencies and natural gas might well lead the way.
Energy Connects includes information by a variety of sources, such as contributing experts, external journalists and comments from attendees of our events, which may contain personal opinion of others. All opinions expressed are solely the views of the author(s) and do not necessarily reflect the opinions of Energy Connects, dmg events, its parent company DMGT or any affiliates of the same.
