divide

The conflict involving Iran and the disruption of the Strait of Hormuz have shaken global energy markets. Supply constraints and extreme volatility have driven oil prices sharply higher, exposing a growing structural divide in how major oil companies operate across the Atlantic.

European majors profit from trading strength
Companies such as BP, Shell, and TotalEnergies have benefited from strong oil trading performance. Their global trading networks allow them to move crude and refined products across regions, taking advantage of price differences created by supply disruptions.

These firms trade volumes far exceeding their own production, turning volatility into profit. In the current crisis, trading has significantly boosted earnings, offsetting weaker performance in other segments.

Volatility creates both gains and exposure
The sharp rise in Brent crude prices and market instability has created lucrative arbitrage opportunities. Companies have rerouted fuel shipments across longer and unusual routes to capture higher margins.

However, these strategies come with risks. Trading at such scale requires large amounts of capital, and holding cargoes for extended periods increases financial exposure if market conditions shift.

Trading as a shock absorber
For European majors, trading divisions have acted as a buffer during the crisis. Losses from disrupted production or regional exposure have been partially offset by gains in trading, highlighting the strategic importance of these operations in volatile markets.

US majors rely on production strength
In contrast, Exxon Mobil and Chevron focus primarily on large scale oil and gas production. Their output significantly exceeds that of European rivals, giving them a strong advantage when prices rise.

While they have more limited trading operations, their upstream strength allows them to generate substantial cash flow in high price environments without relying heavily on market arbitrage.

Structural differences in strategy
The divergence reflects long term strategic choices. European companies invested more heavily in renewables and diversified energy portfolios, which limited growth in their upstream production. US firms, by contrast, maintained a strong focus on expanding oil and gas output.

As a result, European majors depend more on trading to drive returns, while US majors depend on production scale.

Analysis
The Iran war has highlighted a clear split in the global energy industry between trading focused and production focused business models. European majors have shown that strong trading capabilities can generate significant profits during periods of disruption, effectively turning volatility into an advantage.

However, this model is inherently unpredictable. Trading gains depend on market conditions and may not be sustainable if volatility declines. In contrast, the US model offers more stable returns tied directly to production levels and commodity prices.

In the long term, this divide could shape investor perceptions and valuations. If European companies continue to rely heavily on trading while lagging in production, the gap between them and US rivals may widen. The industry is increasingly defined by a fundamental question: whether it is more profitable to move oil around the world or to produce it at scale.

With information from Reuters.

GRAPEVINE, Texas — A generational divide over the Iran war surfaced between older attendees and their political heirs at this year’s Conservative Political Action Conference, as the group’s leaders pleaded for unity in a challenging midterm election year for Republicans.

Younger conservatives at CPAC, which concluded Saturday, spoke of disappointment and even betrayal over President Trump’s war against Iran, saying in interviews with the Associated Press that the president’s actions run counter to his many pledges to oppose foreign entanglements.

Meanwhile, older conservatives were looking past Trump’s campaign criticism of military action to achieve regime change, arguing that the war in Iran is a pragmatic act necessitated by threats to the United States.

The bright dividing line emerged in conversations with a dozen participants on either end of the age spectrum who gathered this week for the annual meeting of conservatives, being held outside Dallas. That split could reflect flagging enthusiasm for Trump among some younger voters, a potentially troubling sign for Republicans heading into midterm elections and for the conservative movement as it looks beyond Trump’s tenure.

“We did not want to see more wars. We wanted actual America-first policies, and Trump was very explicit about that,” said Benjamin Williams, a 25-year-old marketing specialist for Young Americans for Liberty. “It does feel like a betrayal, for sure.”

Worries about sending troops to Iran

Williams, from Austin, Texas, said he worries about his friends in the military, especially his Air Force officer brother. More broadly, he sees the war as an unnecessary disruption to the stability in the Middle East that could have long-term negative effects on the U.S. economy.

“Trump’s rhetoric was very important for people of my generation,” Williams said.

Auburn University sophomore Sean O’Brien’s support for Trump has slipped, especially with his talk of sending U.S. ground troops into Iran. “I’m not happy,” he said.

Sending troops into Iran, he said, “would be full betrayal.”

With at least 1,000 troops from the 82nd Airborne Division deploying in the Middle East, O’Brien said, “That’s what keeps me up at night.”

Older attendees’ views

Older CPAC participants were far more supportive of the war effort, describing Trump as wisely responsive to what they described as the threat Iran posed. Several suggested that Trump did not initiate the war, but that Iran had decades ago.

“I don’t believe he started a new war. He was acting in response to a 40-year-old war by Iran,” said 70-year-old retired defense contractor Joe Ropar of McKinney, Texas. “How long were we supposed to wait? I think he did what he had to do when he had to do it.

“Do nothing? I’m not on board with that,” Ropar said.

Echoing a common theme from older participants, Kelle Phillips said Trump’s decision was a pragmatic reaction to a real threat that overrules the best hopes of campaign rhetoric.

“You campaign on what you want to do and then the world’s dynamics happen,” said Phillips, a 61-year-old author and religious instructor from Frisco, Texas. “I think the difference is if you have someone in the Iranian regime who wants to destroy America, you can’t reason with them.”

Trump’s goals in Iran, James Scharre believes, are short-term and not a concern for those adverse to a long slog overseas.

Scharre, 61, also interprets Trump’s steadfast campaign opposition to regime change as a preference, not an ironclad promise.

“I think he said he was against it,” he said. “Trump is a wise leader. He does what works. And I’m for it.”

High-profile conservatives also split

Cracks in the conservative coalition began appearing early in the war, led by influential opinion leaders like podcaster Tucker Carlson, a staunch opponent of the Iran war.

Joe Kent recently quit his post as Trump’s director of the Center for Counterterrorism at the Department of Homeland Security, saying in his departure statement that “I cannot in good conscience support the ongoing war in Iran” and that “Iran posed no imminent threat to our nation.”

Right-wing podcaster Stephen K. Bannon, a longtime Trump advisor and former White House aide who is expected to speak at CPAC, has worried aloud that a protracted Mideast military engagement would cost Republicans support by pushing some conservatives to sit out the November midterms.

This comes at a time when Republicans’ hold on the U.S. House is in jeopardy and the GOP’s thin Senate majority is not as secure as it appeared just a few months ago.

A recent survey from the Associated Press-NORC Center for Public Affairs Research indicates that while Trump’s approval rating is low but holding steady, the conflict could be turning into a major political liability for his administration. About 59% of Americans say U.S. military action in Iran has been excessive, the poll found.

Calls for unity

CPAC Chairman Matt Schlapp acknowledged conservatives were divided over Iran and said the convention’s annual straw poll will include a question about it. The results were to be released later Saturday.

“Any consensus is still to be determined. I think people trust President Trump, so I don’t think there’s been any shaking of his support,” Schlapp told the AP. “But I think underneath there’s concern about where does this lead.”

Tiffany Krieger, a 20-year-old sophomore at the University of Pittsburgh, said her onetime level-10 support for Trump has dipped to 5 over the war.

“It seems like the love for him is plateauing. We see our party splitting apart and we’re supposed to be united,” said Krieger, of Harrisburg, Pa. “I think this issue with the war has put a line through the conservative movement.”

Almost if addressing Krieger directly, Mercedes Schlapp, senior fellow for the CPAC foundation, opened Thursday’s session of the conference in Texas with a direct appeal.

“We cannot divide from within,” she told an audience of hundreds from the stage at the convention center. Referring to political opponents, she added: “Let’s stay united. They want us divided.”

Beaumont writes for the Associated Press.