Expert: Oil giants’ windfall profits likely temporary amid Iran war

Rising crude prices amid the ongoing conflict involving Iran are expected to deliver short-term windfall profits for oil companies, but experts warn the gains may come at a cost to consumers.

Neil Atkinson, a visiting fellow at the National Centre for Energy Analytics in Washington, DC, told Al Jazeera, “Crude oil is going to cost an awful lot more” for refiners.

Integrated oil companies and the producers embedded within them could potentially see increased earnings, Atkinson explained, noting that “whatever increase enters the market it will flow through the value chain,” allowing profits from products that are eventually sold.

“Yes, the oil companies will make windfall profits. The producers will make windfall profits in the short term. There’s no question of that. But ultimately, this is massively detrimental to their retail customers, and this is not good,” he added.

Analysts say while the surge in prices may temporarily benefit major oil producers, higher costs are likely to ripple through the economy, putting additional strain on consumers already facing rising energy bills.

By Vafa Guliyeva