Energy Giants Pocket Record Profits as Iran War Drives Up Fuel Prices

Six months of conflict in the Middle East have sent oil and natural gas prices soaring, pushing up costs for gasoline and electricity. But while consumers feel the pinch, energy companies are enjoying their highest profit margins ever recorded. A new report from the CCOO union’s economic office, released Tuesday, shows the energy sector’s profitability has smashed its previous record since the war in Iran began. Looking at the average of the last four quarters—a method that smooths out seasonal swings—energy firms now keep 24.5 cents in profit for every euro they sell. That figure comes before taxes, interest, and depreciation are deducted. The sector’s margins have climbed from 21.1% a year ago and now more than double the 11% seen between 2018 and 2019. This category includes oil refining, electricity supply, and fuel trading—all of which are posting historic results amid skyrocketing crude prices. The main driver, according to the report, is oil refining, which hit a 28.4% margin over the past year. Export sales jumped 66% while domestic sales rose 31%. Refining alone accounts for 31% of the overall price increases tracked by the Business Margins Observatory. Wholesale fuel trading is also breaking records, with margins above 30%. The report notes that even as supply costs rise, these companies have enough market power to protect their profits and expand margins in absolute terms. Across the broader economy, business margins reached nearly €97 billion in the second quarter, or 12.8% of sales. That compares with a pre-inflation average of 10.5% between 2009 and 2021. The report attributes this to a “decoupling” between sales and costs that began during the Ukraine war, allowing companies to boost margins. Banks are also seeing peak profitability, with margins on income at 29% in 2025—the latest data available—even as interest rates fall. Real estate and mining activities have also improved, with margins of 31.1% and 22.3%, respectively, the latter up from 14.8% a year earlier.