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Houthi attacks on Saudi energy sites pushed Brent oil to about $114 on October 23. That helps Exxon Mobil, which sells crude and fuel at those prices. Airlines, which buy jet fuel near a record, face higher costs and are raising holiday fares to pass part of them on.
Source: Bloomberg ↗
When war threatens a major oil supplier, the price of oil rises, and companies that sell oil earn more while companies that burn it pay more.
Brent crude traded about $114 and US crude about $100.40 on October 23, after Houthi attacks on Saudi energy sites, including Aramco facilities. Higher oil prices help producers such as Exxon Mobil (XOM), which sell crude and fuel at those prices. They hurt airlines. US jet fuel is near a record high. Airlines are raising holiday fares to cover part of it. Separately, the months-long Hormuz crisis is still restricting liquefied natural gas shipments from Qatar. With low storage, that has pushed European gas prices to their highest since December 2022. That disruption cuts both ways for Exxon, which has stakes in Qatar's LNG. How much all this adds to Exxon's profit is not yet known.
The link fails if oil falls back. Brent sliding toward $100 or below through November, as attacks on Saudi sites stop, would show the lift to Exxon fading. ING said reports that Trump is weighing fresh strikes on Iran, and the deployment of a second US aircraft carrier, undermine hopes of calmer US-Iran relations after the November midterms. It now calls its earlier $80 fourth-quarter Brent forecast unattainable. Qatari gas cargoes moving freely again and European gas prices falling through November would also weaken the case.
Exxon Mobil may gain less than the oil price suggests. The Qatari disruption could also hurt Exxon's own gas projects, and a quick cease-fire would pull oil down before any gain shows up in reported results.
Houthi militants attacked Saudi energy sites, including Aramco facilities, and Aramco ordered staff out of its Dhahran headquarters. Saudi Arabia is a huge oil supplier, so traders fear less oil will reach buyers. That fear, along with a Libyan pipeline shutdown and reports that Trump is weighing new strikes on Iran, pushed Brent to about $114, on course for a third weekly gain of about $6.
A producer sells what it pumps at the going market price, so when the price rises, each barrel earns more. Separately, the Hormuz crisis that followed the Iran war is still restricting Qatari liquefied gas shipments (gas chilled into a liquid so tankers can carry it). Together with low storage, that has pushed European gas to its highest price since December 2022.
Exxon Mobil produces and sells crude and refined products, so it receives these higher prices. Airlines are on the other side, because they buy jet fuel at the market price. How much extra profit Exxon earns is not yet known.
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