Equinor, Norway's national oil company, reported second-quarter profits of $11.5bn as oil and gas prices surged following the US-Israel war on Iran and disruption to shipping through the strait of Hormuz.
Key facts
- Equinor's profits nearly doubled to $11.5bn (£8.6bn) in the three months to the end of June.
- The jump was driven by higher oil and gas prices caused by the war against Iran.
- Equinor increased oil and gas production at the start of the conflict.
- A near-halt to shipping through the strait of Hormuz caused Gulf oil flows to slump.
- Equinor is the UK's biggest gas supplier.
Profits at Norway’s state oil company, Equinor, nearly doubled to $11.5bn (£8.6bn) in the three months to the end of June, according to the Guardian. The surge was driven by a jump in oil and gas prices caused by the war against Iran.
The Guardian reported that Equinor benefited from a decision to ramp up oil and gas production since the start of the conflict. The move allowed the company to help fill a gap in the market after a slump in oil flows from the Gulf.
That slump followed the throttling of shipping traffic through the strait of Hormuz, a key route for global oil supplies. A near-halt to shipping through the strait caused Gulf oil flows to fall sharply, the outlet reported.
Equinor, which is the UK’s biggest gas supplier, was well positioned to capitalise on the higher prices. By increasing output as Gulf supplies fell, the company captured stronger earnings during the second quarter.
The Guardian attributed the price rises to the US-Israel war on Iran. The conflict disrupted the flow of oil from the Gulf region, sending prices higher and boosting the earnings of producers able to increase supply.
Why it matters
Equinor's results show how conflict in the Middle East can reshape global energy markets and hand windfall profits to producers outside the region. As the UK's biggest gas supplier, Equinor's decisions also carry weight for European energy security and consumer prices.
Frequently asked questions
How much did Equinor's profits rise?
Equinor's profits nearly doubled to $11.5bn (£8.6bn) in the three months to the end of June, according to the Guardian.
Why did Equinor's profits increase?
The rise was driven by a jump in oil and gas prices caused by the war against Iran, along with Equinor's decision to ramp up production during the conflict.
What role did the strait of Hormuz play?
A near-halt to shipping through the strait of Hormuz caused a slump in oil flows from the Gulf, which Equinor's increased production helped to offset.