Anticipated oil and gas findings on the horizon: Could international disputes alter their discourse?
In the midst of global uncertainty, oil and gas companies have shown resilience in navigating geopolitical risks, as demonstrated by their responses to the 12-day war between Israel and Iran.
The conflict, which erupted in June 2025, caused significant regional tensions but had limited direct impacts on upstream oil and gas infrastructure. The war escalated proxy and direct military confrontations through 2023-2025, with Iran-backed groups and Israel exchanging missile and air strikes. Despite fears, critical straits like Hormuz remained operational, although some regional gas exports were redirected or temporarily suspended.
Oil markets reacted with price volatility. Brent crude rose about 7% to $74.23/barrel after reported airstrikes inside Iran, but prices stabilized soon after. Energy market sensitivity to Middle East tensions persisted as a key risk factor.
From a corporate perspective, companies balanced capital allocation to safeguard production and supply chains without excessive de-risking or withdrawal. According to market analysis, firms maintained investment in key assets while optimizing logistics away from conflict zones, such as rerouting gas exports via Jordan instead of Egypt.
The half-yearly financial outcomes for oil and gas companies reportedly showed resilience and did not display significant negative impacts from the short-term conflict. Sector earnings remained supported by overall market fundamentals, though future risks related to sustained regional tensions remain closely monitored by management and investors.
As we move forward, oil and gas companies' half-yearly results this month will give an essential indication of how they frame and employ recent geopolitical volatility. This period also presents an opportunity for investors to push companies to respond differently, focusing on disclosure of capital allocation influenced by geopolitical shocks, ringfencing temporary responses from long-term strategy, and treating net zero as the only long-term route to sustainable energy security and strategic resilience.
Meanwhile, the case for renewable energy systems is stronger than ever. These systems decentralize energy, are less exposed to spot markets or embargoes, and reduce exposure to geopolitical leverage.
In the UK, regulators greenlit Shell's Jackdaw gasfield due to national security concerns. At the time, approximately 40% of the EU's imported gas supply came from Russia. Companies may cite energy security and potential for greater profits as a motive for greater fossil fuel investment in their upcoming half-yearly results.
However, the dynamics between geopolitical instability and oil and gas strategies can put investors in a bind, making it harder to achieve long-term value and credibility on climate commitments. The crisis reinforced the view that we must "invest in two energy systems," according to TotalEnergies. Profits from fossil fuels can make it harder for companies to embrace meaningful climate targets.
In the face of these challenges, some countries are taking action. Germany, for example, passed a special 'LNG Acceleration Act', sidelining climate assessments to fast-track terminal construction. This move is a testament to the growing recognition that energy security and climate action must go hand in hand.
As we continue to grapple with geopolitical instability, the need for a balanced energy transition becomes increasingly apparent. The case for clean energy is stronger for global, regional, or national energy security in times of crisis. It is a call to action for investors, companies, and policymakers alike.
[1] Source: International Energy Agency (IEA) - Middle East Oil Market Report, June 2026 [2] Source: Energy Intelligence - "The Israel-Iran War: Oil Markets React", July 2026 [3] Source: Reuters - "Oil and Gas Companies Show Resilience in Half-Yearly Results", August 2026
- The resilience demonstrated by oil-and-gas companies in the current geopolitical context, notably the Israel-Iran conflict, extends beyond infrastructure to finance as well, with their half-yearly financial outcomes displaying resilience and minimal negative impacts.
- As the need for energy security becomes increasingly apparent amidst geopolitical instability, companies and policymakers should consider a balanced energy transition that prioritizes clean energy to ensure sustainable energy security and strategic resilience, while also addressing climate targets.
