TotalEnergies expects second-quarter results to receive a boost from the extended rally in energy prices prompted by the Middle East conflict, but cautioned that income from liquefied natural gas will fall sharply on weaker European demand.
The French energy major said Thursday in an update ahead of its earnings that downstream results and cash flow should increase sharply from the first quarter, supported by higher refining and petrochemical margins as well as oil trading.
At the same time, the conflict likely hit second-quarter output by around 210,000 barrels of oil equivalent a day, a less severe impact than its previous expectations of 360,000 barrels of oil equivalent a day.
The improvement is mainly due to the ramp-up of production offshore United Arab Emirates over the course of the quarter and the restarting of production in other countries in the region during June. However, it was unable to ship a "significant portion" of this production due to the conflict, TotalEnergies said.
Rivals Shell and BP have both also recently pointed to higher second-quarter trading results while flagging lost production volumes because of the conflict, which has disrupted the flow of oil and gas and triggered sharp price swings.
TotalEnergies expects hydrocarbon production in the quarter to reach nearly 2.4 million barrels of oil equivalent a day, representing organic growth in line with quarterly guidance of 4%, and helping boost upstream cash flow by $1 billion from the first quarter.
The outbreak of war in the Middle East at the start of the year sent energy prices soaring as the hostilities choked supply routes. Around 20% of global oil supply flows through the Strait of Hormuz, a key passage that has seen prolonged blockages due to the tensions.
A fragile ceasefire agreement between the U.S. and Iran offered brief respite but flaring tensions and intermittent attacks have sent Brent crude futures higher again.
Write to Andrea Figueras at andrea.figueras@wsj.com and Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
July 16, 2026 05:01 ET (09:01 GMT)
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