Majors

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.

To win last year, McIlroy needed to beat Justin Rose – who finished tied third on Sunday having led by two at the turn – in a sudden death play-off after bogeying the 72nd hole.

And he did not make it much easier for himself this time around. Having scorched the field to take a record six-shot lead after 36 holes, he stuttered to a one-over 73 on Saturday.

Tied with Young going into Sunday, Northern Ireland’s McIlroy heaped pressure on himself with a sloppy double-bogey five on the fourth after three-putting from eight feet.

He dropped another shot at the par-three sixth, but after mixing four birdies with seven pars to build a two-shot lead over world number one Scheffler heading to the last, he said his “greatest stress” on Sunday was not knowing where his ball ended up on the 18th after flailing his drive right and in among the trees.

“It could go anywhere. It could be anywhere,” added the world number two, who also drew level with Americans Phil Mickelson and Lee Trevino on six majors.

“There were a few others. I thought my second putt on 11 was huge to avoid making bogey there.”

Despite falling behind Young and Rose, and with Scheffler creeping up the leaderboard, McIlroy insisted he never felt as though his chance had slipped away.

“If I hadn’t birdied the seventh and eighth holes, I would have started to push a little bit,” added the 36-year-old, who became just the sixth wire-to-wire Masters winner.

“But I think the birdies on seven and eight, Justin bogeying 11 and 12, and then me birdieing 12, I never felt like I was out of it. I never felt like I had to press at all.”