BY COMFORT OGBONNA
TotalEnergies is forecasting a strong rise in first-quarter earnings, driven by robust trading performance and higher oil prices fueled by the ongoing conflict involving Iran. The company said Thursday that while the war has disrupted a portion of its operations, the overall financial impact has been largely offset by gains in other areas of its business.
The energy giant reported that the conflict has shut down about 15% of its total production, primarily due to disruptions in the Middle East. However, higher crude prices and increased output from other regions have helped stabilize overall production levels compared to the fourth quarter of 2025. Despite losing roughly 100,000 barrels of oil-equivalent per day in the region, the company has managed to maintain steady output by ramping up operations elsewhere.
A major driver of the improved outlook has been the surge in global oil prices. Brent Crude climbed to multi-year highs near $120 per barrel following U.S. and Israeli strikes on Iran earlier this year. The situation escalated further when Iran restricted traffic through the strategically vital Strait of Hormuz and launched attacks affecting energy infrastructure across the Gulf, including liquefied natural gas facilities in Qatar and the SATORP refinery in Saudi Arabia, in which TotalEnergies has a stake.
The price rally significantly boosted upstream earnings, as higher crude prices translated directly into increased revenues from oil production. At the same time, the company benefited from strong downstream performance, with its refineries operating at over 90% capacity during the quarter. TotalEnergies also highlighted strong results from its trading operations, particularly in March, when market volatility created opportunities for profitable crude and petroleum product trades.
Refining margins in Europe were especially strong, reaching $11.40 per barrel during the quarter. This represents a 192% increase from $3.90 per barrel in the same period last year and matches the high levels seen in the final quarter of 2025. These elevated margins underscore the tight supply conditions in global fuel markets amid ongoing geopolitical disruptions.
The company also reported a significant boost to its liquefied natural gas (LNG) business, driven by active trading during periods of market volatility. The disruption of supply routes and heightened demand for alternative energy sources created favorable conditions for LNG traders, further supporting earnings growth.
TotalEnergies’ performance reflects a broader trend across the global energy sector. Rivals such as BP and Shell have also indicated that price swings linked to the conflict have lifted their trading profits. Meanwhile, U.S. oil majors Chevron and ExxonMobil reported that higher crude prices boosted their upstream earnings, although their downstream segments faced pressure due to hedging losses tied to undelivered cargoes affected by shipping disruptions.
Looking beyond oil and gas, TotalEnergies expects its Integrated Power division to generate around $500 million in earnings for the quarter, roughly in line with the same period last year. Its Marketing and Services segment is also projected to deliver stable results, indicating resilience across its diversified business model.
The company noted a projected $5 billion increase in working capital for the quarter. Approximately half of this is attributed to normal seasonal business patterns, while the remainder reflects the impact of rising oil and product prices on the value of its inventories. This buildup highlights the financial implications of operating in a high-price environment, where holding inventory becomes more capital-intensive.
Despite the strong earnings outlook, investor sentiment showed some caution. Shares of TotalEnergies slipped slightly, trading down 0.8% at 76.04 euros in early trading, although they recovered from earlier losses of more than 3%. The modest decline suggests that while the company’s near-term performance is strong, markets remain mindful of ongoing geopolitical risks and operational uncertainties.
TotalEnergies is scheduled to release its full first-quarter earnings report on April 29, where investors will be looking for more detailed insights into how the company is navigating the complex balance between geopolitical disruption and financial opportunity.
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