The windfall profits of oil companies from the US - Iran war are only one side of the picture.
Behind the impressive financial results of Saudi Aramco, ExxonMobil, Chevron, and Shell, a much more important strategic rearrangement is unfolding: major Western energy groups are gradually abandoning direct control of critical oil infrastructure, limiting their exposure to ever increasing geopolitical risks.
The decision of BP to put its fields in the North Sea up for sale, combined with its exit from the management of the BTC pipeline and the corresponding strategy of Shell, shows that energy giants do not see a temporary crisis, but a new era of lasting conflicts, where pipelines, fields, and tankers are transformed into targets.
Companies continue to earn billions from high oil prices, but at the same time they make sure not to be the ones who will bear the greatest cost if the energy war escalates.
Trump denounces oil company superprofits
Donald Trump publicly attacked oil companies, stating that «they are making too much money», as the skyrocketing of oil prices has significantly increased fuel costs in the United States.
The timing is far from coincidental. With midterms approaching and polls showing a strengthening of Democrats, the White House sees energy inflation transforming into a political problem.
The average price of gasoline in the US has increased by approximately 37% since the start of the conflict with Iran, burdening American households.
Record profits for Aramco, ExxonMobil, Chevron, and Shell
Saudi Aramco announced a profit increase of 33%, to $33.4 billion.
ExxonMobil more than doubled its profits to $14.5 billion, while Chevron announced profits of $12.1 billion, more than quadruple compared to last year.
Correspondingly, Shell announced nearly $10 billion in profits, the second best quarterly performance in its history.
High Brent prices and restricted transport through the Strait of Hormuz act as a profitability multiplier for the entire energy sector.
The paradox
The truly interesting element, however, is not the superprofits.
It is that at the same time British Petroleum (BP) is proceeding with one of the largest strategic divestments of recent decades.
According to information from Reuters, BP has put up for sale all oil and gas assets it holds in the British North Sea.
These are five offshore production complexes, with a total production of approximately 110,000-115,000 barrels of oil equivalent per day, an amount corresponding to approximately 5% of the company's total production.
This fact cannot be considered a corporate game of resources, mainly because BP, although born 110 years ago in Persian oil fields where the British then actively participated in all aspects of the industry, reached its current size precisely thanks to North Sea oil, better known as the Brent benchmark.
BP was essentially built on North Sea oil and Brent, which constituted for decades the global reference point for crude pricing.
From operators they transform into investors
The sale of the fields is not an isolated case.
A few weeks ago, BP handed over the operational management of the Baku-Tbilisi-Ceyhan (BTC) pipeline to state owned SOCAR of Azerbaijan, maintaining only its equity stake.
At the same time, Shell decided to sell 35% of the Aphrodite field in the Cypriot EEZ, with Hungarian state owned MOL as the leading buyer, while Chevron and NewMed Energy remain in the project.
The common feature of all these moves is evident.
Major Western energy groups are gradually reducing their direct operational exposure and transforming into financial investors rather than managers of critical energy infrastructure.
Attacks on pipelines change everything
Officially, BP attributes its exit to field depletion and the increased tax burden in the UK.
However, several analysts consider that the real reasons are deeper.
The British oil «sharks», having tightly held the entire chain for a century, suddenly began transferring the resource and transport base to local state control.
The blowing up of the Nord Stream pipelines, Ukrainian drone attacks on Caspian energy facilities, Houthi attacks in the Red Sea, but also the crisis in the Strait of Hormuz, have created a new reality.
Energy infrastructure is now treated as military targets.
For an operator, this means huge insurance costs, increased liabilities toward customers, and significant compensation risks in case of operational disruption.
On the contrary, a simple shareholder maintains financial participation without bearing the entirety of operational and legal risk.
Companies discount that the crisis is here to stay
The simultaneous appearance of two phenomena, explosive profitability and divestment from physical infrastructure, leads many analysts to the conclusion that major energy groups are discounting a long period of geopolitical instability.
In other words, they do not question that demand for oil and gas will remain high.
They question, however, the safety of holding and managing the infrastructure itself.
In this new environment, strategy seems to be changing: less exposure to pipelines, terminals, and offshore facilities, more indirect participation through shareholdings and investments.
«Maneuvers»
There is a theory that major oil and gas players, whose public and shadow representatives sit at the top of government, possess certain information and are conducting preemptive maneuvers.
It is likely that this information was used to evaluate long-term risks, leading to the decision to abandon the role of physical operator and retain only shareholder and investor functions.
These actions are more than logical, given the terrorist attack on Nord Stream, Ukrainian drone attacks on oil terminals in the Caspian Sea, and, of course, the prolonged blockage of the Strait of Hormuz.
In case of physical damage to any oil and gas pipeline, risks translate into significant losses for the operator, as contractual terms guarantee steady and safe flow, namely, contract fulfillment.
The sabotage of three Nord Stream pipelines and attacks on tankers clearly demonstrated that it is much safer to control indirectly, rather than own, logistics routes.
Prices remain high
In the new reality of rising tensions, the real cost of producing barrels and cubic meters becomes secondary, as conflicts show no signs of receding, which means demand and prices will remain consistently high.
The increasing number of attacks on pipelines and tankers suggests that, if current trends continue, the cost of insuring terminals, gas compressor stations, and other production and logistics infrastructure could soon exceed profits.
Security costs will weigh exclusively on the operator for an indefinite period, while subsequent losses will be distributed among shareholders and the operator's share may be minimal, which means compensation will be significantly smaller than the investment.
For now, it appears that major leaders of the oil industry expect neither an overall improvement in hydrocarbon markets nor a reduction in the probability of attacks on vulnerable points of critical infrastructure.
Evidently, forecasts are so gloomy that the British decided to leave physical levers behind and resort to the financial safety net.
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