The escalation of war in the Middle East has propelled the shares of the world’s largest oil companies to historic peaks. Shell, the largest energy firm in Europe, saw its valuation reach a record £190 billion on the London Stock Exchange, marking a 12% increase in late February and early March. Similar trends were observed in the United States, where ExxonMobil and Chevron reached valuations of $630 billion and $390 billion, respectively.
This upward momentum is a direct result of the “energy supply shock” caused by strikes targeting Iranian territory. Investors have flocked to traditional energy stocks as the international oil benchmark surged to $117 a barrel earlier this week. Despite the volatility and the physical risks to regional infrastructure, the financial markets are betting on sustained high prices for the foreseeable future.
The rise in stock prices has come despite significant logistical setbacks in the region. For instance, Shell was forced to declare force majeure on deliveries after a production shutdown at a major Qatari LNG facility. However, the premium placed on available oil and gas supplies has been so high that these localized shutdowns have had little negative impact on overall corporate valuations.
Beyond the U.S. and UK, European firms like TotalEnergies and ENI have also posted gains between 10% and 13%. While some of these companies have not yet surpassed their previous all-time records, the pace of their recovery is notable. Norway’s Equinor has emerged as a particularly strong beneficiary, with its shares climbing 20% due to its lack of Middle Eastern production assets and its role as Europe’s top gas provider.
The sudden wealth generated by the conflict has led to renewed calls for fiscal intervention. Critics argue that oil majors are effectively winning a “lottery ticket” at the expense of working families. The proposed solution from many environmental and social groups is a robust windfall tax designed to accelerate the transition to clean energy and stabilize domestic utility bills.