By Joshua Kirby

TotalEnergies said it expects a boost to its financial results from higher oil and gas prices as the energy industry continues to weigh the impact of the war in the Middle East.

The French energy major said Thursday that it expects first-quarter production of oil and gas to be at the same level as the previous quarter, when it reported output of 2.545 million barrels of oil equivalent a day.

A chunk of TotalEnergies's hydrocarbon output is offline due to the U.S. and Israel's war with Iran, which has spread to the wider Persian Gulf. As a result of the war, TotalEnergies has shut down or is shutting down production in Qatar, Iraq and offshore United Arab Emirates, representing around 15% of its total output. The company last week said a refinery complex in Saudi Arabia, a joint venture with the kingdom's national oil company, was closed after being damaged.

But that hit should be partly offset by startups of new fields in Libya and Brazil, the company said. Income from production is meanwhile expected to rise significantly, reflecting a surge in prices amid the Middle East's tumult. The group expects higher oil and gas prices, which surged to their highest point since 2022 as the conflict reignited, to add $2 billion to $2.5 billion to its working capital for the quarter.

The update from TotalEnergies underscores the volatility caused by the Iran war to energy markets and the businesses operating in them, as they grapple with complex dynamics caused by the disruption and resulting higher prices for their products. British energy giant Shell last week cut its outlook for first- quarter gas production after its Pearl facility in Qatar was targeted in the war. But the group said it expects a boost to its bottom line from oil trading after prices per barrel skyrocketed.

If the war persists, the blow to TotalEnergies's production could be more serious, Chief Executive Officer Patrick Pouyanne said earlier this week.

"If this blockade lasts more than three months, we will start to face some fairly serious supply issues," he said at an event in Washington, D.C. hosted by media group Semafor.

Still, if negotiations resume and the Strait of Hormuz is quickly reopened, the situation can "come back to normality" within three months, Pouyanne said.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

April 16, 2026 02:59 ET (06:59 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.