Trump’s Iran war may stymie climate gains with boost to big oil, experts say
The war in Iran has sent oil prices soaring, giving major U.S. oil companies record profits and a financial cushion to lobby for fossil‑fuel policies. Experts warn this windfall could stall the shift to renewable energy and entrench Trump‑era subsidies.
The ongoing conflict in Iran has triggered a sharp rise in global oil prices, sending U.S. energy giants into a profit surge that experts say could derail the country’s clean‑energy ambitions. The surge has given the industry a financial buffer that could be used to reinforce its political influence and protect the fossil‑fuel subsidies championed by the Trump administration.
Profit Surge Amid Energy Shock
Attacks on Iranian oil facilities and the blockage of the Strait of Hormuz—a vital artery for global petroleum shipments—have created a historic energy shock. In the first quarter of 2026, ConocoPhillips reported a $2.3 billion profit, an 84% jump from pre‑war levels. Valero Energy, the nation’s top refiner, posted $1.2 billion in quarterly earnings, while Liberty Energy, founded by former Trump energy secretary Chris Wright, saw a 32% rise to $10 million. BP and Shell also posted stronger-than‑expected results, with BP’s first‑quarter profit more than doubling the previous year.
In contrast, Chevron and ExxonMobil experienced a dip in the first quarter, but analysts predict a turnaround: ExxonMobil’s second‑quarter earnings are expected to more than double, and Chevron’s annual profit could climb 56%. These numbers illustrate a clear pattern—oil majors are riding a wave of windfall gains that are unlikely to be short‑lived.
Consumers Bear the Cost
While oil companies celebrate record earnings, American consumers are paying the price. On Wednesday, the national average gasoline price hit $4.52 per gallon—the highest since July 2022. Kelly Mitchell, executive director of watchdog group Fieldnotes, argues that the industry’s success is directly tied to the hardship of everyday drivers: “Their business interest is to extract as many dollars out of a barrel of oil as possible, and the folks on the other side of the equation are Americans who are just trying to fill up their gas tank.”
President Trump has dismissed the spike as a “very small price to pay,” while his administration has rolled back a Biden‑era ban on liquefied natural gas (LNG) exports, a move that has further pressured U.S. gas prices. Representative Sean Casten of Illinois criticized the White House for prioritizing the oil sector over consumers, noting that the U.S. has more oil buyers than producers and that the administration’s policies favor the former.
Windfall Profits Fuel Political Clout
Experts warn that the windfall earnings give big oil a “wall of money” to protect its Trump‑era political victories. Lukas Shankar‑Ross of Friends of the Earth said the profits could lock in subsidies and influence, citing the 2025 One Big Beautiful Bill Act as the largest expansion of fossil‑fuel subsidies in a generation. Economists Isabella Weber and Gregor Semieniuk from the University of Massachusetts Amherst noted that increased cash flow translates into more lobbying dollars, especially in the wake of past fuel shocks like Russia’s invasion of Ukraine.
During the Ukraine‑related energy crisis, the oil industry ramped up lobbying for more domestic production, arguing that it was essential for energy security. The same trend is expected to continue, with the industry’s high margins encouraging investment in fossil fuels—a trajectory that runs counter to climate‑change mitigation goals.
Renewables Still Gain Ground
Despite the oil boom, renewable energy is not standing still. Renewables have become more economically competitive than they were in 2022, and in March, the U.S. generated more electricity from renewables than from gas for the first full month. High gasoline prices may also erode Trump’s popularity, potentially opening the door for a pro‑environment president in 2029. However, the industry’s financial cushion could still slow the transition, according to Weber.
In short, the Iran war has created a windfall for big oil that could reinforce fossil‑fuel subsidies, boost lobbying power, and stall the clean‑energy transition—an outcome that experts say is “absolutely” a concern.
What Happens Next?
The next few months will be telling. Oil majors are poised to double their second‑quarter earnings, while consumer gasoline prices may continue to climb. Policymakers will need to balance the immediate economic impact on consumers with the long‑term goal of decarbonizing the energy system. The industry’s increased political clout could shape the debate on subsidies, LNG exports, and the pace of renewable deployment.
For now, the windfall profits from the Iran conflict remain a powerful force that could either accelerate or impede the United States’ transition to a cleaner energy future.
Why it matters
The windfall profits give big oil a financial advantage that can be used to influence policy and slow the shift to renewable energy, directly affecting both the climate and consumers’ energy costs.
Key points
- Iran war spurs record oil profits, threatening clean‑energy transition
- Consumers face higher gasoline prices while oil majors profit
- Windfall earnings could strengthen fossil‑fuel subsidies and lobbying
- Renewable energy remains competitive, but oil’s clout may stall progress
- Future policy decisions will determine balance between consumer costs and climate goals
Frequently asked questions
How has the Iran conflict affected U.S. oil company profits?
Oil majors like ConocoPhillips and Valero Energy have seen multi‑billion dollar profit increases in the first quarter of 2026, with forecasts indicating further gains in the second quarter.
What impact are higher gasoline prices having on consumers?
The average U.S. gasoline price rose to $4.52 per gallon, the highest since July 2022, placing a financial burden on everyday drivers.
Could the windfall profits influence U.S. energy policy?
Yes, the increased cash flow provides oil companies with more resources for lobbying, potentially reinforcing fossil‑fuel subsidies and slowing the adoption of renewable energy.
Are renewable energy sources gaining traction?
Renewables have become more competitive and, for the first time in March, produced more electricity than gas for an entire month.
