The Oil Supermajors Just Generated Nearly $90 Billion in Cash — More Than After Russia Invaded Ukraine

In the second quarter of 2026, the world's five oil supermajors — Exxon Mobil, Chevron, BP, Shell and TotalEnergies — generated $48 billion in profit and nearly $90 billion in cash.

That cash generation figure is an all-time high — higher even than in the wake of Russia's full-scale invasion of Ukraine in early 2022, which until now was the reference point for what a windfall quarter looked like in this industry.

The driver is not mysterious. Hostilities between the US and Iran have kept crude elevated, with Brent for October delivery around $84.42 on 10 August as traders assessed whether a deal to reopen the Strait of Hormuz was close. Energy was the leading S&P 500 sector in July, up 12.1%.

The question that actually matters

A company that generates unprecedented cash has exactly three things it can do with it, and the choice shapes shareholder returns for years:

Return it to shareholders through dividends and buybacks. This is what the market currently expects and largely rewards. It also implicitly concedes that the company sees limited attractive reinvestment.

Strengthen the balance sheet. Less exciting, but it's what allows a company to survive the next downturn without cutting the dividend — which is the single event long-term energy shareholders fear most.

Invest for the future. Either in new production, or in the energy transition, or both. This is the option the market has punished for most of the last decade.

Whichever they choose tells you what the supermajors actually believe about the next ten years of oil demand. Heavy buybacks say "this is a mature, declining business — take your money back." Heavy capex says "we expect demand to persist and we intend to supply it."

Why the buyback answer isn't automatically the good one

Investors conditioned by the post-2020 era have learned to cheer buybacks in this sector, and there was a good reason: the industry destroyed enormous shareholder value in the 2010s by investing aggressively at high prices into projects that never earned their cost of capital.

But buybacks at $84 oil have a specific problem. You are retiring shares at a price that itself reflects elevated commodity prices. If oil normalises, the company has spent peak-cycle cash buying its own stock at a peak-cycle valuation. That is the same mistake as over-investing at the top, just wearing a shareholder-friendly costume.

The distinction between a durable and a temporary payout matters enormously here, and it's the core of our piece on dividend yield versus dividend growth. A high yield funded by a windfall quarter is not the same asset as a growing dividend funded by mid-cycle cash flow.

The Canadian angle

This is not an abstract sector story for Canadian investors. Energy is a large weight in the S&P/TSX Composite, and energy strength is a substantial part of why the TSX is at a record high.

If you hold a Canadian index fund or a Canadian dividend ETF, you own this cash flow question whether or not you follow the sector. The payout policies announced over the next two quarters will directly affect the distributions those funds pass through to you.

The risk sitting underneath all of it

Every figure above rests on elevated crude, and elevated crude rests on the Strait of Hormuz remaining constrained.

Negotiations have been reported as advancing — a Qatari spokesperson described talks between Oman and Iran as at an advanced stage — while US rhetoric has hardened at other points. Oil has whipsawed on each headline.

An orderly resolution is good for the world economy, good for inflation, good for consumers, and bad for the earnings that just produced these numbers. Energy investors are, whether they frame it this way or not, positioned against a peaceful outcome. That is worth being honest with yourself about.

What to do with it: don't extrapolate windfall quarters. If you're building income exposure, look at what these companies earn at mid-cycle oil — call it $65–$70 — rather than at $84. A dividend that survives mid-cycle is an income stream. One that only works at $84 is a bet on geopolitics with a coupon attached.