We can tell you who will really get rich from this oil crisis – and how we can stop them | Isabella Weber and Gregor Semieniuk

The strait of Hormuz is now at the centre of the world. While the US-Israeli war against the Islamic Republic leads to death, destruction and pollution across the Middle East, the whole of the global economy is bracing for the fallout from the conflict. Shipping through the narrow passage has come to a near halt. Already, crude oil prices have shot to above $100 per barrel, up from $60 a barrel at the beginning of the year, while gasoline prices are jumping and airlines are announcing price hikes. Governments of oil-importing countries are scrambling to contain the fallout, announcing measures ranging from shorter work weeks to conserve fuel to price regulations. What they are not yet discussing – and what they should – is who, exactly, is about to get very rich from this.
The 2022 oil and gas crisis offers a template. It was the last time we saw a price explosion of this magnitude, triggered by Russia’s invasion of Ukraine. In our recently published paper in Energy Research & Social Science we map, in unprecedented detail, where those profits went. We also suggest there are ways to prevent profiteering, and redistribute the gains and losses from these shocks more fairly.
In 2022, net income of publicly listed oil and gas companies reached $916bn globally – a figure more than three times that of the preceding years (even excluding 2020). The US was the single largest beneficiary: US-headquartered companies captured $281bn. This exceeded American investments in the entire low-carbon economy that year ($267bn). While European figures pale in the face of the US, European oil and gas companies also raked in tens of billions of dollars more in profits than in recent years.
Whether firms will see a similar windfall from the Iran shock depends on how long the war lasts, and how high oil and other raw material prices go. But with Brent above $100 a barrel – a level that has already proven, in 2022, to generate record profits – the trajectory is clear. The question is not whether there will be extraordinary fossil fuel profits this time. The question is how much, who will receive them, and whether governments have the will to intervene.
What makes our study novel is not the total windfall figures but the network analysis of holdings that traces profits all the way to the ultimate beneficiaries. Using shareholding data covering 252,433 nodes – public companies, private equity holdings, pension funds, family offices – we reconstruct who ultimately has a claim on the 2022 windfall.
The result is stark. In the US, 50% of all fossil fuel profit claims accrued to the wealthiest 1% of individuals. The bottom 50% of the population – 66 million households – received 1%. The top 0.1%, some 131,000 families, received 26 times more than the entire bottom half. The rich own all kinds of financial vehicles invested in fossil fuel firms: family offices, private equity and hedge funds, direct shareholdings as well outright business ownership. Pension schemes claim a mere 14% of profits, but serve a wider majority of people.
The racial and educational dimensions compound this. White households, representing 64% of the population, captured 87% of profits. Black households (14% of the population) received 3%. Hispanic households (10%) received 1%. College graduates alone (38% of households) claimed 79% of the total.
The 2022 crisis produced stark inflation inequality. The redistribution happens through two channels. The poorer you are, the more you spend more on essentials like energy. Lower-income households spend 3.3% of their budget on gasoline versus 2.1% for the top 20% in the US – they were disproportionately hit by price increases. At the same time, the profits generated by those price increases flowed almost entirely in the opposite direction.
For the top 0.1% of wealth owners, incremental fossil fuel profits in 2022 over those in 2021 nearly compensated for the entirety of their inflation burden, meaning the extra windfall they received essentially cancelled out the extra cost-of-living increases they faced. For the bottom 50%, the compensation amounted to 0.05% of disposable income – statistically invisible. It isn’t just that the poor suffered more from inflation, it’s that the rich were protected by the very mechanism that was impoverishing everyone else.
Windfall profits are the hidden redistribution that happens with every oil shock. They do not show up in wage statistics. They do not trigger automatic stabilisers. They are perfectly legal, thoroughly opaque and a recurring part of the system, as we see now with the war on Iran. One thing all analysts agree on is that crude oil prices will quickly reach and surpass $120 a barrel – the price it traded at during mid-2022.
For Europe, it may feel like a repeat. Europe will once again have to pay the higher market price for energy, with costs borne primarily by households, and gains captured primarily by financial asset holders, while firms will try to pass on their rising production costs thus stoking sellers’ inflation. If the strait remains closed, it is only a matter of time until central banks raise interest rates to combat inflation, complicating an already difficult recovery from the 2022 energy crisis and risking unemployment. It is inexcusable that Europe didn’t move faster to transition away from fossil fuel dependence, especially in the four years since the last price shock. Instead it replaced dependence on Russia with dependence on US energy imports. This is now coming home to roost.
There is also a climate dimension to this. The 2022 record profits “rehabilitated” the fossil fuel industry – boosting capital expenditure in new fields, reversing energy transition commitments among major oil companies and attracting finance away from renewables. In early 2026 EU governments were already watering down climate policy. A new shock of similar magnitude risks repeating this.
Our study’s policy recommendation is straightforward: a permanent excess profit tax on oil and gas, defined as returns above a specified threshold. Revenues could be used to at least partially finance measures to protect households from cost shocks, such as the German 2022 gas price brake. They could also be used to finance the low-carbon energy transition, which would leave countries less vulnerable to these price shocks in the future. Alternatively, and more immediately effective in the crisis we face, oil and gas prices could be capped in wholesale markets through a multilateral effort. The cap on Russian oil prices shows it can be done
We calculated that taxing only the 2022 incremental US profits would have yielded $225bn to the US government – enough to nearly double American clean energy investment that year, or to double it across all emerging markets excluding China. Others have calculated that globally, $280bn in excess profits went to private companies (as opposed to state-owned ones).
The UK and the EU introduced temporary excess profit taxes in 2022. The EU ones expired. The US debated the measure and declined to act. The political window closed as prices rebalanced. It is about to open again.
The question for European governments – and for any serious discussion of the economic fallout from the strait of Hormuz – is whether this time the opportunity will be used. The evidence is now available. The mechanism is understood. The cycle is repeating. We could prevent profiteering and protect ordinary people. What is missing is not knowledge. The question is whether there is political will.
-
Isabella Weber is an associate professor of economics at the University of Massachusetts Amherst and author of the forthcoming book Anti-fascist Economics. Gregor Semieniuk is an associate professor of public policy and economics at the University of Massachusetts Amherst and researches the economics of climate change mitigation