TotalEnergies Flags Strong Quarter as War Rattles Energy Market
(Bloomberg) -- TotalEnergies SE signaled a strong first quarter as surging energy prices and rising production outside the Middle East helped offset the impact of the Iran war.
Results from oil and gas production and trading are expected to rise significantly in the quarter, the French energy giant said in a trading update Thursday, ahead of earnings due later this month.
The outbreak of war at the end of February upended markets from crude to jet fuel as shipping through the crucial Strait of Hormuz chokepoint came to a near standstill. Europe’s oil majors have large trading operations that often profit from increased volatility. Shell Plc and BP Plc both reported strong trading performance for the quarter.
Total’s trading arm embarked on one of the biggest-ever buying sprees of Middle Eastern oil last month as the war intensified, adding to the upward pressure on prices. It had already been snapping up crude from the North Sea before the start of the conflict, tightening near-term supply.
The company managed to keep oil and gas production in line with the previous quarter as new projects in Brazil and Libya mitigated the decline in Middle East output. Tankers and gas carriers were prevented from transiting Hormuz, triggering shut-ins in countries including Iraq, Qatar and the United Arab Emirates — all places where Total operates.
Key energy assets across the Persian Gulf have also been halted because of Iranian strikes. Total said last week that the Satorp refinery in Saudi Arabia, a joint venture with Saudi Aramco, was shut after suffering damage in an attack.
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