I. Introduction

The 2026 US-Iran War, including the closure of the Strait of Hormuz, has led to what the International Energy Agency has characterized as the “largest supply disruption in the history of the global oil market.” [1] Following the closure of the Strait of Hormuz on March 5, 2026, as Figure 1 shows, oil and LNG exports were stranded, causing Brent Crude to surge past $120 per barrel and forcing Qatar and Kuwait to declare force majeure on oil exports.

Figure 1: Map of the Strait of Hormuz (source: http://www.drishticuet.com)

As Figure 2 shows, shipping traffic through the Strait of Hormuz has dramatically dropped in March and April 2026 after Iran declared the closure of the Strait on March 5, 2026. Even the US carried out the blockage of Iranian ports on April 13, 2026. As a result of the dual blockage of the Strait of Hormuz by Iran and the US, shipping traffic through it has dramatically dropped in March and April 2026.

In particular, the passage of oil tankers (light blue) transporting crude oil has almost ceased in March 2026 compared to February. The only alternative routes are two pipelines, in Saudi Arabia and the United Arab Emirates, which allow part of the oil production to be rerouted to the Red Sea and the Gulf of Oman. However, oil shipping through these alternative routes has been limited.

Figure 2: Traffic through the Strait of Hormuz, February, March, April 2026 (source: IMF Portwatch & Statista)

Consequently, according to shipping data from Kpler, combined exports of crude oil from Saudi Arabia, Iraq, Kuwait, Oman, Qatar, and the UAE dropped from 469 million barrels in February 2026 to 263 million barrels in March 2026 – a significant decline of 206 million barrels, or 44 percent, as Figure 3 shows.

Figure 3: Significant drop in crude oil exports from six Gulf states (source: Kpler and Aljazeera)

As Figure 4 shows, crude oil production in the major Gulf Arab exporters plunged in March 2026 due to the US-Iran war, according to data released by OPEC.

Figure 4: oil production reduction (crude oil & condensates in thousands of barrels per day) of Gulf States, 2026

As exports of crude oil from the Gulf States significantly dropped following the US-Iran War and the closure of the Strait of Hormuz, the US took initiatives to increase its exports of crude oil to meet the global demands for oil.

As Figure 5 & 6 show, US crude exports significantly increased in the 2020s, particularly in April and May 2026 after the US-Iran War. U.S. crude exports climbed to a record 5.6 million barrels per day in May 2026 as the Middle East crisis pushed up demand for US oil from Asian and European countries.

Figure 5: US exports of crude oil (source: eia)

Figure 6: Weekly US exports of crude oil in 2026 (source: eia)

With this information in background, this paper analyzes the impacts of the US-Iran War on US the oil sector.

II. The impacts of US-Iran War on US oil sector

1. Oil Production

From 2004 to 2007, the US imported an average of 10 million barrels per day (b/d) of crude oil, and ever-growing oil and gas imports seemed inevitable. But the shale oil and gas revolution in 2010 turned these expectations on their head, delivering the most rapid production increase in the history of the oil industry. From 2009 to 2019, as Figure 7 shows, US crude oil production grew by nearly 7 million barrels per day – adding almost twice the production volume of the United Arab Emirates (UAE) in just a decade.

Figure 7: Weekly US field production of crude oil (source: eia)

Over the last three decades, the US, Saudi Arabia, and Russia have alternated as the top crude producers, but always by small margins. The US first became the world’s largest crude oil producer in 2018, overtaking Russia and Saudi Arabia. Driven by the shale “fracking” boom, the US has maintained its position as the global leader every year since, and hit an all-time high of over 13.5 million barrels per day in 2025, as Table 1 shows.

Table 1: World top 10 crude oil producing countries in 2025

Global oil prices surged as the US-Iran War broke out on February 28, 2026, and crude oil exports from Gulf States through the Strait of Hormuz became virtually impossible. Following the outbreak of the War, as shown in Figure 8, Brent crude prices fluctuated between $100 and $110 per barrel from March to May, after hovering around the $70 per barrel mark in February 2026.

Figure 8: Brent crude price (source: Financial Times)

As Figure 9 shows, WTI prices also surged. With most commercial traffic in the Strait of Hormuz becoming virtually impossible after the outbreak of the US-Iran war in February 2026, WTI prices rose from between $60-65 per barrel in February 2026 to around $90-110 in March-May 2026.

Figure 9: WTI crude oil price (source: Trading Economics)

As WTI crude oil prices surged following the US-Iran War, as shown in Figure 12, it was expected that US crude oil production would increase. Contrary to such expectations, there is no evidence that US crude oil production increased significantly in March, April, and May 2026 following the US-Iran War. In March, April, and May 2026, US crude oil production remained at approximately 13.6 million barrels, a level similar to that of 2025.

Nevertheless, the US is estimated to remain the world’s largest crude oil producer in 2026. This is because, as shown in Figure 4, Saudi Arabia’s crude oil production plummeted by 25% from the previous month to approximately 7.8 million barrels in March following the US-Iran War, and Russia’s production also decreased after March due to drone attacks by Ukraine on Russian oil facilities. For example, OPEC estimated that Russia’s crude oil production in April 2026 was approximately 8.8 million barrels, a decrease of 460,000 barrels compared to the same period of the previous year.

Figure 10: US production of crude oil, 2026 (unit: thousand barrels per day)

2. Oil exports

Since 2018, the US has held the position of the world’s no.1 producer, accounting for approximately 20–25% of global crude oil production, but consumes most of its output domestically. In contrast, Saudi Arabia exports a significant portion of its crude oil production and has consistently held the top spot among global crude oil exporters in terms of both volume and value.

For example, as shown in Table 2, the ranking of the world’s top 10 crude oil exporters in 2024 was Saudi Arabia in first place, Russia in second, and the United States in third.

However, as shown in Table 3, the ranking of global crude oil exporters in 2025 was Saudi Arabia in first place, the United States in second, and Russia in third. According to Vortexa data for 2025, Saudi Arabia’s crude oil exports were approximately 8.1 million barrels per day, the United States’ exports were approximately 6.6 million barrels per day, and Russia’s exports were approximately 5.8 million barrels per day.

Table 2: World top 10 exporters of crude oil in 2024

Table 3: World top 3 crude oil exporting countries in 2025 (source: Vortexa)

However, the US-Iran War in February 2026 has changed the whole situation of the world oil market. As Figure 11 shows, U.S. crude oil exports have surged in recent months following the outbreak of the War, driven by increased demand from countries around the world seeking alternatives to compensate for the decline in crude oil exports and production from Gulf States. As a result, the United States has emerged as the world’s largest oil exporter in 2026, overturning the long-standing dominance of Saudi Arabia and Russia. This shift is strengthening the grip of US oil companies on the global energy market and demonstrates that the landscape of global energy trade is being reshaped, particularly due to the US-Iran War.

The US’s rise to become the world’s largest crude oil exporter is a surprising turnaround considering its decades-long reliance on Middle Eastern oil and the oil embargo imposed by some OPEC members in 1973 in retaliation for U.S. support for Israel.

As Figure 11 shows, according to data from ship tracking service provider Vortexa, US crude oil and fuel exports increased to approximately 10.5 million barrels per day in May 2026, driven by increased crude oil production and the release of strategic reserves. This allowed the US to maintain its position as the world’s largest crude oil exporter for three consecutive months in 2026. According to Reuters, Russia’s crude oil exports in May were 7 million barrels per day, while according to Vortexa, Saudi Arabia’s crude oil exports were 5.9 million barrels per day.

“U.S. crude oil exports in 2026 increased by 32% year-over-year and 30% compared to January and February,” Niels Rasmussen, Chief Shipping Analyst at BIMCO, stated in a report. According to CAS data, this surge in US crude oil exports occurred as the number of vessels transiting the Strait of Hormuz plummeted by approximately 89% from over 3,700 in February to about 400 in May. [2]

In addition to reduced crude oil exports and production in Middle Eastern Gulf states, the surge in US crude oil exports is attributed to the fact that US West Texas Intermediate (WTI) crude traded at a significant discount compared to Brent crude, the international benchmark. This substantial price discount relative to Brent makes it more economical for overseas buyers to purchase US crude and export it globally.

Figure 11: US crude oil exports climb to near record levels in 2026 (source: EIA)

As Figures 12 and 13 show, the major buyers of US crude oil in recent years have been European countries such as the Netherlands, Italy, and Germany, as well as Asian countries such as Japan and South Korea. In May 2026, US crude oil exports to Europe and Asia reached all-time highs, with Asia maintaining its position as the largest buyer of US crude oil for two consecutive months in April and May 2026, importing 2.45 million barrels per day. Europe closely followed with 2.4 million barrels per day.

Figure 12: WTI crude exports by destination

Figure 13: US medium, heavy crude exports by destination

“Asian countries’ purchases of US crude oil were primarily driven by necessity, while European purchases appear to be driven mainly by favorable transportation costs and low freight rates,” said Rohit Rathod, Chief Oil Market Analyst at Vortexa.

In May 2026, at least 283,000 barrels — or about 5% — of US crude oil exports came from the US Strategic Petroleum Reserve. This crude oil, part of the 172 million barrels of US Strategic Petroleum Reserve currently being released to counter soaring international oil prices, was headed to European and Asian markets.

Asia accounted for nearly 50% of the year-over-year increase in cargo volume from March to May 2026, and BIMCO added that cargo volume to Asia is expected to rise from 4.1 million barrels per day in the same period of 2025 to 5.4 million barrels per day in 2026.

Matt Smith, Head of Commodity Research at Kpler, said, “Given the sharp drop in crude oil supply from Gulf countries in the Middle East, it is not surprising that there is such high demand for US crude oil in Asia.” [3]

As Figure 14 shows, he added, “Many oil tankers from Asian countries, which previously imported crude oil mostly from the Middle East, are entering US ports to purchase US crude oil. With shipping routes to the Persian Gulf effectively blocked, these Asian countries are now turning their attention to the US Gulf Coast.” [4]

Figure 14: Very large crude carriers bound for US ports, April 2024-May 2026 (source: Kpler & CNBC)

Demand from Japan, which typically imports the bulk of its crude from the Middle East, accounted for the lion’s share of Asian imports of US grades in May, at 808,000 barrels per day, a 32% jump on the month and setting a record. US exports to Japan were steady at 602,000 barrels per day in May.

Japanese refiners ordered approximately 3 million barrels of US crude oil in April of this year. Sources stated that Japan led the purchase of US crude oil for May shipments in early April, with refiners in South Korea, Singapore, and Thailand also participating. According to traders, at least 60 million barrels of US Gulf Coast crude were purchased from Asian countries for May shipments, a level equivalent to the April shipment volume. This is the highest level in three years. [5]

As Figure 15 shows, in the case of South Korea, crude oil imports from the Middle East in March 2026 decreased year-on-year by -42% from Kuwait, -13% from the United Arab Emirates, -12% from Saudi Arabia, and -8% from Iraq, while crude oil imports from the United States increased by 79% and from Norway by a staggering 353%.

Figure 15: South Korea’s crude oil imports in March 2026 compared to March 2025 (source: https://www.asiae.co.kr/article/2026042407471154924)

The sharp decline in Middle Eastern crude availability pushed buyers toward US Gulf Coast suppliers, with South Korea emerging as the largest US crude buyer at a record 1.1 million barrels per day in May 2026.

In addition to Japan and South Korea, China is actively moving to purchase US crude oil. As China readjusts its energy strategy due to disruptions in crude oil supply from the Middle East and a tightening of energy markets across Asia, it is resuming large-scale purchases of US crude oil and liquefied natural gas (LNG).

Some interpret this purchasing move by China as a significant concession for having suspended US LNG imports in early 2025 amidst heightened trade tensions caused by US President Donald Trump’s tariff measures, and furthermore, as a strategic reward to the United States.

According to Nikkei Asia, China has recently resumed imports of US energy; tanker tracking data indicates that approximately 600,000 barrels per day of US crude oil are scheduled to be shipped to China in April of this year. This signifies the resumption of energy trade between the two countries, which had been suspended due to past trade tensions. [6]

Liang Mi, a columnist from Sichuan Province, China, analyzed, “China is purchasing approximately 600,000 barrels of US crude oil per day, or about 18 million barrels per month, a volume amounting to about $10 billion at current prices.”

On the other hand, The EU’s main partners for oil imports have changed significantly in the last few years. Since Russia’s full-scale invasion of Ukraine on 24 February 2022, the EU has imposed sanctions on Russia in order to diminish its ability to wage its illegal war of aggression.

Russia’s share of the EU’s oil imports dropped from 25.8% in 2021 to 2.2% in 2025. This was mainly compensated for by growing imports from the US, Norway and Kazakhstan.

In terms of the value of the oil imported in 2025, the US tops the list with an even greater share of 15.1%, followed by Norway (14.4%), Kazakhstan (12.7%), Libya (9%) and Saudi Arabia (6.5%). [7]

US crude oil exports to EU member states continued after the outbreak of a US-Iran War in 2026.

European buyers also stepped up purchases of US crude oil. US crude oil shipments to the Mediterranean and Black Sea also hit an all-time high in May 2026 and Bulgaria, Croatia, Turkey, and Greece emerged as new buyers of US crude oil.

Medium and heavy crude exports from the US climbed to a record high in May 2026 with 4.3 million barrels to Italy and 3.5 million barrels sent to Germany.

3. Oil revenues

Although US crude oil exports increased significantly following the US-Iran War on February 28, 2026, there is not enough data on how much profit the US gained from such an increase in crude oil exports. Therefore, this paper investigates the extent to which US oil companies profited from the increased crude oil exports.

The US-Iran war and the blockade of the Strait of Hormuz had contrasting effects on the profits of the world’s largest oil companies. As shown in Figure 16, the profits of the five major Western oil companies moved in different directions during the first quarter of 2026. While European oil companies saw an increase in profits, US oil companies experienced a decrease.

In the first quarter of 2026, the profits of the UK’s Shell and France’s Total Energies increased by approximately 24% and 29%, respectively, compared to the first quarter of 2025, while the UK’s BP saw its profits surge by approximately 132% year-on-year. In contrast, US oil giants ExxonMobil and Chevron saw their earnings decline by approximately 46% and 37%, respectively, compared to the same period last year.

According to industry experts, this divergence seen in Q1 2026 reflects structural differences in how these companies generate income. US majors, with greater exposure to upstream price realization and domestic shale production, have faced margin pressure despite higher oil prices. European firms, on the other hand, have benefited more from trading operations and LNG portfolios, which tend to profit from market dislocations and volatility triggered by geopolitical shocks.

However, earnings of ExxonMobil and Chevron have recently rebounded partially. Although data is not yet available, earnings for ExxonMobil and Chevron are projected to have increased significantly in the second quarter of 2026, specifically April, May, and June. This is because the US-Iran War, which broke out on February 28, 2026, and the blockade of the Strait of Hormuz are estimated not to have major impact on the first quarter of 2026, specifically January, February, and March, while having significant effects on the second quarter of 2026.

In fact, analysts forecast that the earnings of ExxonMobil and Chevron will surge for the remainder of the year. Oil analysts expect ExxonMobil’s second-quarter earnings to be more than double compared to the same period last year, and its annual earnings to increase by 46%. Chevron’s earnings are expected to be more than triple in the second quarter and grow by 56% annually. This is because 2026 is projected to be the best year, as the current situation resembles the period when the two companies earned significant profits, particularly in 2024, following 2022 when the average US gasoline price hit an all-time high of $5.02 per gallon due to the War in Ukraine. This is because, as shown in Figure 17 & 18, the recent average US gasoline price has surpassed $4.00 per gallon, and WTI price has soared.

Figure 16: Europe & US oil firms’ revenues, first quarter 2026 (Source: Statista)

Figure 17: Recent US gas price (Source: AAA)

Figure 18: WTI crude oil price spike, 2026 March-May

III. Conclusion

This paper analyzed the impact of the US-Iran War in February 2026 on the US oil sector. Following the outbreak of the US-Iran War and the blockade of the Strait of Hormuz, crude oil exports from Gulf States decreased significantly and international oil prices surged; consequently, the US set out to increase crude oil exports to meet global demand. As crude oil exports from Gulf States declined sharply in 2026, demand for US crude oil from Asian and European countries surged, leading US crude oil exports to reach an all-time high of 5.6 million barrels per day in May 2026.

However, despite the significant increase in US crude oil exports and the surge in international oil prices, contrary to expectations, there is no evidence that US crude oil production increased significantly in March, April, and May 2026 following the US-Iran War. In March, April, and May 2026, US crude oil production remained at approximately 13.6 million barrels per day, a level similar to that of 2025.

Meanwhile, despite a significant increase in US crude oil exports and a surge in international oil prices, the earnings of US oil giants ExxonMobil and Chevron in the first quarter of 2026 fell by approximately 46% and 37%, respectively, compared to the same period of the previous year. Although this result was somewhat unexpected, given the recent increase in these companies’ earnings, it is estimated that the earnings of US oil giants would have increased significantly in the second quarter of 2026, when the effects of the US-Iran War and the blockade of the Strait of Hormuz began to fully manifest.