Europe’s Oil Traders Are Cleaning Up While the World Burns
When US and Israeli warplanes struck Iran on February 28, the price of a barrel of Brent crude was hovering around $70. Within days, it punched past $120. By the time Iran effectively sealed the Strait of Hormuz on March 4, cutting off roughly one-fifth of the world’s oil supply and forcing QatarEnergy to declare force majeure on its LNG exports, the largest energy shock in market history was fully underway.
The International Energy Agency coordinated the largest emergency reserve release in its 50-year history. More than 30 nations across Europe, North America, and northeast Asia agreed to tap 400 million barrels of strategic stockpiles. The market barely noticed. Crude surged 17% after the announcement. Natural gas followed: the Dutch TTF benchmark, Europe’s key gas price reference, jumped 60% to €52 per megawatt-hour. Goldman Sachs warned that roughly 80 million tonnes per annum of LNG supply, 19% of the global total, was effectively offline.
Someone had to profit from it. As it turns out, that someone was European.
The $2.5 billion quarter nobody wants to talk about
The trading desks at BP, Shell, and TotalEnergies made at least $2.5 billion combined in the first quarter of 2026, according to Reuters calculations based on sources inside each company. BP used the word “exceptional” to describe its oil trading result, language it had not deployed since the peak of the Ukraine energy crisis in 2023. Shell said trading profits would be “significantly higher.” TotalEnergies said much the same, adding that the gains would more than offset the loss of 15% of its global production.
The numbers from TotalEnergies are particularly striking. The Financial Times reported in late March that the French company cleared more than $1 billion on a single trade, using futures, options, and swaps to bet aggressively on rising prices as the Hormuz closure unfolded. That is not a typo. One trade. One billion dollars. European refining margins, which TotalEnergies CEO Patrick Pouyanné called unprecedented, hit $11.40 per barrel, up 192% from a year earlier.
Pouyanné told CNBC that the world had “never experienced” refining margins at current levels and described the oil products market as “dislocated.” He warned that if the conflict continues through the summer, European natural gas prices could hit $40 per million British thermal units, more than double the levels prevailing in late March.
Equinor, the Norwegian state-backed major, added its own contribution. Its trading and marketing division blew past its $400 million quarterly guidance, driven by the same price volatility that filled European coffers while emptying everyone else’s.
The market has noticed. Equinor shares have surged 23.7% since the conflict began. BP, TotalEnergies, and Shell have all posted double-digit gains. The message from investors is unambiguous: in a war, own the traders.
Why the Americans are losing
ExxonMobil and Chevron, the two largest US oil producers, are having a very different war.
Exxon warned in early April that its first-quarter earnings could take a hit of roughly $5.3 billion, primarily from timing impacts on financial hedges and cargoes that never arrived because the Strait of Hormuz was shut. On top of that, the company said it would record an impairment of $600 million to $800 million because supply disruptions prevented the physical shipment of cargoes associated with some of its hedges. Chevron flagged similar effects, projecting after-tax earnings could be $2.7 billion to $3.7 billion lower than expected. Between them, the two American majors disclosed about $7 billion in mark-to-market derivative losses.
Analysts have slashed their Q1 forecasts for both companies. Their shares have slipped since the conflict began, even as European rivals rallied.
The reason comes down to a structural difference in how these companies approach energy markets. European majors spent decades building trading operations that trade volumes many multiples of their actual production. BP trades around 10 times its oil output and eight times its refined product capacity, roughly 9 billion barrels per year. Shell trades around 12 million barrels per day of oil and oil products against 2.8 million barrels of daily production. TotalEnergies trades 8 million barrels per day of physical oil and 85 million barrels per day in derivatives.
The American model is different. Exxon and Chevron use traders primarily to optimise flows within their own networks of wells, refineries, and petrol stations. It is a defensive approach that prioritises predictable earnings over speculative gains. When markets are calm, that conservatism looks prudent. When markets go haywire, it looks expensive.
After CEO Darren Woods took office in 2017, Exxon did try to expand its trading arm, but scaled back during the pandemic downturn. “US majors have traditionally treated trading as an optimisation tool to avoid large swings in quarterly earnings,” said David Hewitt, a former Chevron employee and now a senior consultant at Hewitt Energy Perspectives. “BP is not given to hyperbole. So calling its results ‘exceptional’ is telling,” he added. That discipline has cost the Americans dearly.
The political economy of chaos
The trading windfalls are not sitting well in European capitals. Five EU member states, Germany, Spain, Italy, Portugal, and Austria, wrote to the European Commission in early April demanding a windfall tax on energy company profits. “Those who profit from the consequences of war must do their part to ease the burden on the general public,” the finance ministers wrote, arguing that a levy would allow governments to provide relief to consumers and curb inflation without straining public budgets.
The Commission is considering it. Transport and Environment, a Brussels-based NGO, estimates that oil companies stand to make a €24 billion windfall on road fuel alone in 2026. The EU’s collective fossil fuel bill has risen by €22 billion since the war started. Dozens of countries around the world have already cut fuel taxes to ease the pain, meaning less money for public services everywhere from Italy to Zambia.
Meanwhile, Global Witness analysis using Rystad Energy data found that the world’s top 100 oil and gas companies banked more than $30 million per hour in unearned profit in March. The total for the month: $23 billion. If oil averages $100 per barrel through December, the windfall reaches $234 billion. Saudi Aramco alone stands to collect $25.5 billion on top of its already enormous baseline profits. Three Russian companies, Gazprom, Rosneft, and Lukoil, are on track to make an estimated $23.9 billion from the war by year-end. Russia’s oil export revenues hit $840 million per day in March, 50% higher than February, according to the Centre for Research on Energy and Clean Air.
The IEA’s Fatih Birol called it the biggest shock ever to the global energy market. UN climate chief Simon Stiell warned that “fossil fuel dependency is ripping away national security and sovereignty, and replacing it with subservience and rising costs.” The European Central Bank has cautioned that a prolonged conflict will likely trigger stagflation and push energy-dependent economies, including Germany and Italy, into technical recession by the end of 2026.
None of this is new. The pattern repeats itself every time geopolitical chaos disrupts supply: prices spike, consumers pay, and companies with large trading desks clean up. The 2022 Ukraine shock produced the same dynamic. The difference this time is the scale. The Strait of Hormuz carries 20% of the world’s oil. Its closure, now in its seventh week, is the largest supply disruption in oil market history. There is no quick fix. Oil and gas supplies will take months to return to pre-war levels, according to analysts.
Diplomacy stalls, trading desks keep winning
Peace talks in Islamabad on April 11 and 12 lasted 21 hours and produced nothing. US Vice President JD Vance, special envoy Steve Witkoff, and Jared Kushner sat across from Iranian negotiators led by Foreign Minister Abbas Araghchi. By 4 a.m. local time, Vance had left without a deal. The sticking points on Iran’s nuclear programme remained unresolved. Each side accused the other of shifting the goalposts. Pakistan is still passing messages between the two sides, and both camps have left the door open to further talks, but no date has been set.
Iran’s foreign minister has since briefed counterparts in Beijing and, according to diplomatic sources, has been in contact with Paris and Berlin. The European capitals are watching the energy markets as closely as the negotiations. A prolonged conflict means sustained high prices, continued windfalls for European traders, and mounting pressure on an already fragile industrial base.
Steel producers across the continent have been hammered. Salzgitter is down 27.9%, thyssenkrupp off 27.3%, ArcelorMittal down 19.1%. Airlines are bleeding: Wizz Air has collapsed 31.2%, Air France-KLM lost 22.1%, easyJet dropped 21.8%. These companies cannot trade their way out of higher input costs. They just pay them.
While diplomats shuttle between capitals, the trading desks keep running. BP reports first-quarter results on April 28. TotalEnergies follows on April 29. Exxon and Chevron report on May 1. Shell closes out the European earnings season on May 7. Expect the European numbers to be very good. Expect the American numbers to reflect the cost of not having a seat at the speculative table.
What this means for Europe’s energy future
There is a deeper question buried in these results, one that matters far beyond the current quarter. Europe’s biggest energy companies have built a business model that is structurally incentivised to profit from disruption. Their trading desks make more money when markets are volatile, when supply chains break, when prices swing wildly. Stability is boring. Chaos is lucrative.
This matters for the energy transition. As long as the companies that dominate European energy markets are financially rewarded for supply shocks, their incentive to prevent those shocks, or to build infrastructure that is resilient to them, is muted. Why invest in redundancy when shortages are the business model?
The windfall tax debate is a symptom, not a cure. Even if the EU imposes a levy on excess profits, the structural incentive to trade volatility remains. The trading desks will adapt, find new edges, and continue to turn geopolitical crises into quarterly earnings.
The real beneficiaries of this system are not consumers, not governments, and certainly not the stability of global energy markets. They are the shareholders of BP, Shell, TotalEnergies, and Equinor. Everyone else is just paying the spread.
As we have previously documented, Europe’s relationship with Iran’s energy sector has been defined by missed opportunities and self-imposed barriers for decades. TotalEnergies’ long “situationship” with the Iranian market is a case in point: a company that could have built lasting partnerships instead finds itself profiting from war-induced chaos. The Iran war has made one thing brutally clear. Europe’s oil majors are very good at what they do. The question is whether what they do is something Europe should want them to keep doing.
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