widens

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.

LONDON — President Trump has said he is strongly considering pulling the U.S. out of NATO, ratcheting up his criticism of European allies and exposing a wider rift in the transatlantic alliance — this time over America’s war alongside Israel against Iran.

While Trump’s talk of a possible NATO pullout dates back years, the comments to Britain’s Telegraph newspaper, published Wednesday, were among the clearest and most disparaging yet — suggesting the fracture has deepened perhaps to a point of no return.

Asked whether he would reconsider U.S. membership in the alliance after the war on Iran ends, Trump replied: “Oh yes, I would say (it’s) beyond reconsideration.”

Contacted by The Associated Press, NATO did not provide an immediate comment.

British Prime Minister Keir Starmer, asked about the comment, said Britain was “fully committed to NATO” and called it “the single most effective military alliance the world has ever seen.”

Many European leaders have felt political pressure over the war, which faces opposition in their countries and has sent petroleum prices soaring as Iran has effectively shut the Strait of Hormuz, the narrow waterway between Iran and Oman through which about one-fifth of the world’s oil passes.

“Whatever the pressure on me and others, whatever the noise, I am going to act in the British national interest in all the decisions I make,” Starmer said Wednesday.

Long-simmering tensions within the alliance have bubbled up again over the war. As energy prices have spiked, Trump has been desperate to get countries to send their ships to the Strait. He’s called his NATO allies “cowards,” pulling at any rhetorical lever he can to get help with the fallout of a war that no ally was consulted on or asked to take part in.

For years, Trump has berated America’s European allies, urging them to assume greater responsibility for their own security and spend more on defense. He has argued that the U.S. has done more for them than the other way around.

A U.S. pullout would essentially spell the end of NATO, which flourished for decades under American leadership.

On Truth Social on Tuesday, Trump lashed out at countries “like the United Kingdom, which refused to get involved in the decapitation of Iran,” and suggested they buy U.S. oil or go to the Strait of Hormuz themselves “and just take it.”

He also wants allies to help fix damage from the war that they had no part in starting.

The U.K. is working on plans that could help assuage Trump.

On Thursday, Foreign Secretary Yvette Cooper will host a virtual meeting of 35 countries that have signed up to help ensure security for shipping in the Strait after the war. Starmer said military planners will also work on a postwar security plan for the strait.

The backdrop: NATO not on board to join U.S. in war

NATO is built on Article 5 of its founding treaty, which pledges that an attack on any one member will be met with a response from them all.

As the Iran war has spread, missiles and drones have been fired toward NATO member Turkey and a British military base on Cyprus, fueling speculation about what might prompt NATO to trigger its collective security guarantee and come to their rescue.

The alliance has not intervened or signaled any plan to. Secretary-General Mark Rutte — who has voiced support for Trump and America’s role in the alliance — has been focusing mostly on Russia’s war against Ukraine, which borders four NATO countries.

NATO operates uniquely by consensus. All 32 countries must agree for it to take decisions, so political priorities play a role. Even invoking Article 5 requires agreement among the allies. Turkey or the U.K. cannot trigger it alone.

In the Mideast war, Trump has bristled at the across-the-board rejection from European and other allies, and even rival China, to help secure the Strait of Hormuz.

Many European Union and NATO member country leaders have fumed since the war’s outset on Feb. 28 because they weren’t informed ahead of time, seen as a break with precedent.

Trump insisted he needed the element of surprise, and he spoke out about possible military action and visibly built up U.S. forces in the region in the run-up to the war.

Rising voices, and tougher action, from Europe over the Mideast war

European leaders have called for the war to stop and want the United States and Iran to return to negotiations over Tehran’s nuclear program, which America and Israel see as a threat.

The vocal opposition in Europe to Trump’s war against Iran has started to turn into action.

Spain — the most vocal critic in Europe — on Monday said it closed its airspace to U.S. planes involved in the Iran war.

Early last month, France agreed to let the U.S. Air Force use a base in southern France after receiving a “full guarantee” from the United States that planes not involved in carrying out strikes against Iran would land there.

Other countries have spoken out against it: Frank-Walter Steinmeier, Germany’s largely ceremonial president, last week called the aggression against Iran a “dangerous mistake” in violation of international law.

U.S. relations with Europe had already soured in recent months over Trump’s call for Greenland — a semiautonomous territory of stalwart NATO ally Denmark — to become part of the United States, prompting many EU countries to rally behind Copenhagen.

Lawless and Keaten write for the Associated Press. Keaten reported from Geneva. AP writer Lorne Cook in Brussels contributed to this report.