Records show Wall Street giant BlackRock has seen the value of stakes in energy firms surge as ordinary households endure punishing price rises
Rich clients of a US investment goliath are among those benefiting from the Iran war caused energy shock.
BlackRock, one of the world’s largest asset managers, has seen its stakes in various energy companies jump on the back of the conflict.
The New York-based multinational is among a host of financial heavyweights quids in while ordinary households are battling soaring fuel prices and the threat of higher energy bills and inflation.
BlackRock manages more than £10trillion worth of assets on behalf of governments, pension funds, and individual investors around the world, and is worth £115billion in its own right.
Its chairman and co-founder is Larry Fink, whose personal wealth is estimated at around £1billion.
The 73-year-old is a lifelong Democrat is said to have known Donald Trump for more than 40 years, since they were both young entrepreneurs in New York, and met the US President at this year’s World Economic Forum in Davos. There is no evidence he has benefited personally from the energy shares spike.
BlackRock is British Gas owner Centrica’s largest shareholder. The value of its 5.25% stake has jumped by more than £30million since the Iran war erupted at the end of February.
The firm’s different offshoots are also big investors in Shell, with their combined holding having leapt £860million thanks to a £20billion surge in the oil giant’s stock market value in the past six weeks.
Meanwhile, BlackRock’s investments in rival BP have shot up by £580million over the same period. It also has stakes in US mega firms Chevron, ExxonMobil and ConocoPhillips.
It comes after the Mirror revealed how fat cat bosses at energy firms has seen their personal fortunes leapt as a result of the share price surge.
Shares in energy firms have jumped in the wake of the war on expectations the conflict will deliver bumper profits on the back of soaring oil prices.
North Sea oil prices hit a record high of nearly $147 a barrel at one stage on Friday as Donald Trump accused Iran of breaking a pledge to reopen the Strait of Hormuz.
By lunchtime it had eased but still stood at $139. Prices have spiked as traders rush to secure supplies from elsewhere given the blockade of shipments from the Gulf region. Oil from the Gulf mostly goes to Asia, including China.
BlackRock declined to comment. However, insiders pointed out that while its clients included mega wealthy individuals and families, around two-thirds of its investors are pensions funds, which have also greatly benefited from rising energy company shares. Among its funds are those with 13 million pension savers in the UK.
Records show the biggest shareholder in another major North Sea producer, Harbour Energy, is German chemicals giant BASF. It offloaded a 5% stake in Harbour in late March, weeks after the war started. Thanks to a jump in Harbour’s share price, it netted £36million more than if it sold them before the crisis began.
Linda Z Cook, chief executive of Harbour, which is also one of the world’s largest oil and gas companies, has seen the value of her stake leap by £4.3million to £26.2million, analysis shows. The increase – about £1million for every week of the war – comes as Harbour Energy’s value has jumped by around £870million.
BASF said: “As we have communicated on various occasions, our participation in Harbour Energy is considered a financial investment and it is BASF’s strategy to exit it over time being mindful of value.”
Simon Francis, coordinator at the End Fuel Poverty Coalition, said: “Behind these share price gains sit a small group of the world’s most powerful investment firms.
“These are not passive bystanders. They are the financial architecture that keeps oil and gas profits flowing from the pockets of ordinary people into the pockets of those who already have the most.
“That the world’s biggest investment firms will have seen their holdings surge in value as ordinary households face soaring bills will sicken anyone struggling with the economic consequences of Trump’s conflict.
“And it is worth remembering that these firms are also among the most powerful lobbying voices in global financial markets.
“The concentration of energy wealth in the hands of a small number of giant investment firms underlines why a strong windfall tax, with revenues redirected to households, is not just fair, it is essential.
“If the Government is serious about using these revenues to help people struggling with their bills, it must resist the lobbying power of an industry whose backers have rarely had it so good.”
