The Iran war has driven Brent crude above $90 per barrel, creating a clear divide in the energy sector between upstream producers, who are capturing windfall revenue, and downstream consumers of oil, including airlines, chemicals, and transportation companies, who are absorbing sharply higher input costs.

Key Highlights

  • Brent up more than 50% since war began: Brent crude has risen from around $60 per barrel before the conflict to above $90, with the World Bank projecting a 2026 average of $94, 36% above 2025 levels.
  • Upstream E&P companies direct beneficiaries: Exploration and production companies with significant crude output are capturing higher per-barrel realisations on production costs that are largely fixed in the near term, directly expanding margins.
  • Shipping and tanker stocks benefit from rerouting: The extended disruption to Strait of Hormuz transit has extended voyage distances and boosted tanker day rates, benefiting crude tanker operators.
  • Airlines, chemicals, and logistics face margin compression: Jet fuel has roughly doubled in price since the conflict began; petrochemical feedstock costs and freight expenses have risen sharply, compressing margins for energy-intensive downstream industries.

The Iran war's impact on the energy sector is not uniform. The same oil price increase that generates windfall cash flow for upstream producers inflicts a parallel cost shock on industries that consume petroleum products as inputs, creating a split-screen effect across the equity market that is reshaping sector performance and relative valuations.

Upstream oil and gas companies, including integrated majors and pure-play exploration and production operators, are the most direct beneficiaries of higher crude prices. With production costs largely fixed in the near term, a sustained increase in per-barrel realisations flows directly into operating cash flow. Brent crude rose from around $60 per barrel before the conflict began in late February 2026 to above $90 in June, a move that materially expands margins for producers with significant existing output. The World Bank's baseline forecast assumes Brent averages $94 per barrel for the full year.

Crude tanker operators have also benefited, as the Strait closure has forced oil cargoes onto longer alternative routes, increasing voyage distances and absorbing vessel capacity, which has supported tanker day rates.

At the other end of the chain, the picture is sharply negative. The aviation industry is absorbing its worst fuel cost shock in years, with jet fuel prices roughly doubling since February 2026 and the global airline trade body projecting industry profits to halve this year. Petrochemical producers dependent on crude-derived feedstocks face elevated input costs at a time when global demand growth is slowing. Land freight and logistics companies are managing higher diesel costs that compress already-thin margins.

Refinery operators occupy a middle position: crack spreads have widened as refined product prices rose faster than crude in some markets, but feedstock cost increases and supply chain constraints are creating dispersion in outcomes by region and configuration.