The escalating conflict involving Iran is driving up global energy prices, generating massive profits for oil and gas companies while pushing higher living costs onto ordinary consumers.
Economists say the surge in energy prices is disproportionately benefiting the wealthiest investors, particularly those with holdings in major oil and gas stocks.
Oil Profits Concentrated Among the Wealthiest
Research by economist Grégory Semieniuk, who examined wealth trends after the Russian invasion of Ukraine in 2022, shows that energy crises tend to channel profits toward a small group of wealthy shareholders.
His analysis found that the United States recorded the largest increase in oil and gas profits during that period. The surge was so large that the rise in fossil fuel profits outweighed the decline in profits from other sectors in the same year.
About half of those profits went to the richest 1 percent of Americans, while the top 10 percent captured roughly 84 percent of the total gains, highlighting the strong concentration of wealth during energy crises.
Rising Energy Costs Trigger ‘Cost-Push Inflation’
While oil and gas investors see windfall profits, consumers face rising prices driven by cost-push inflation.
This occurs when higher prices for raw materials, such as oil, gas, and fertilizers, raise production costs for businesses, which then pass those increases on to consumers.
Energy costs affect nearly every aspect of daily life, from heating homes and electricity bills to transportation and food production. When fuel prices surge, the cost of necessities tends to rise sharply.
Lower-income households are particularly vulnerable because a larger share of their income goes toward essentials such as energy, housing, and food.
Energy Shortages Add to Global Pressure
Economists warn that high prices are only part of the problem. Energy crises also create supply shortages, particularly in developing economies.
While many European countries mainly face higher energy bills, several countries in the Global South risk not having enough energy supplies at all.
Shortages are already emerging in parts of Asia. Authorities in the Philippines and Pakistan have reportedly moved government employees to four-day work weeks to reduce energy consumption, while long queues for gas cylinders have been reported in India.
These measures highlight the widening gap between wealthier countries that can absorb price shocks and poorer nations that face supply constraints.
Crisis Makes Fossil Fuels More Attractive to Investors
Semieniuk also warned that geopolitical crises tend to make fossil fuel companies appear like attractive investments, despite global efforts to move away from carbon-intensive energy sources.
He said such profit surges risk slowing the transition to cleaner energy at a time when governments are trying to reduce reliance on fossil fuels to combat climate change.
Analysts say the current crisis could again reinforce that pattern, with rising energy prices boosting fossil fuel profits even as households and developing economies struggle with higher costs and shortages.
Funny you forgot to mention most of these elites are politicians to begin with