The energy sector is inherently volatile, with oil prices often fluctuating rapidly and dramatically. Wall Street seems to forget this fact every time the energy sector goes through yet another big price swing. Right now, volatility is high, and so are oil prices, thanks to the geopolitical conflict in the Middle East. It is headline-grabbing news, but it really isn’t all that unusual for the energy sector.
However, there’s an important political dynamic here that investors need to consider. It is highlighted by U.S. President Donald Trump’s recent accusation that oil companies are price gouging, which included a call for a Department of Justice review. Here’s what you need to know as you look at companies like Shell (NYSE:SHEL), ExxonMobil (NYSE:XOM), and Chevron (NYSE:CVX) today.
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Gasoline is an everyday necessity
One of the reasons most investors should have some energy exposure in their portfolios is the economic importance of oil and natural gas, and the products derived from them. One of the most important products here is gasoline, which still powers the vast majority of the vehicles on the road. Notably, gasoline prices tend to react very quickly to changes in oil prices. And changing gasoline prices have a very direct impact on consumers’ wallets.
For politicians, that can be a big problem when oil prices are rising. Voters don’t like paying more at the pump and often take out their ire in the ballot box. To make matters worse, energy companies tend to generate very large profits when oil prices are elevated
For example, Shell’s revenues rose 22% in the first half of 2026 compared to the same span in 2025. And its earnings more than doubled, rising from $1.40 per share in the first half of 2025 to $2.94 per share in 2026.
Chevron also got in on the act, with revenues through the first six months of 2026 up 28% over the previous year. Earnings more than doubled, hitting $7.23 per share, up from $3.46 in the first half of 202 ExxonMobil’s results were also strong, with first-half revenues up around 22% and earnings rising by roughly 66%, to $5.60 per share.
It is easy to see how consumers and politicians alike might look at the strong results from some of the world’s largest energy companies and take umbrage. However, that doesn’t mean the companies are price-gouging. Oil and gasoline are commodities, and Shell, Chevron, and Exxon don’t control the price; the market does.
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