Navigating 2026: energy majors focus on discipline and bottom lines

With 2026 off to a strong start, the energy sector is quietly making its position clear: protect what you have, rather than gamble on what you might gain.

From ExxonMobil and Chevron in the Americas to bp, Equinor and Siemens Energy in Europe, the latest quarterly results show solid profits, strong cash generation, and, in many cases, record order books, particularly for grids, turbines and LNG infrastructure.

Yet the mood in executive suites is anything but euphoric. Artificial intelligence, new trade barriers, and the prospect of a global oil surplus are turning 2026 into a year where balance sheets look strong, but visibility feels fragile.

Steering investments

Deloitte’s Energy & Industrials research group estimates that only 15% to 25% of listed energy companies are likely to deliver revenue growth above 5% — a sign that the easy gains from post-pandemic recovery and price spikes are largely behind them. Management teams are responding by prioritising margins over volume and stress-testing investment plans against downside scenarios that, two years ago, would have looked like outliers.

“At the core is the need to manage exploration and production in a way that limits the risk of stranded assets over the long run,” says Marc Ostwald, Chief Economist and Global Strategist at ADM Investor Services. “More concentrated upstream portfolios make it easier to steer investment and avoid large losses. That naturally goes hand in hand with being financially prudent and keeping a tight rein on leverage.”

AI imperative

The build-out of data centres is becoming one of the most powerful new forces in the power system. Together with electric vehicles and industrial electrification, Deloitte estimates it could push peak electricity demand in major economies around 26% higher by 2035.

For energy suppliers, that creates a new type of anchor customer: technology companies needing vast amounts of reliable, often low-carbon power under long-term contracts. Utilities, oil companies, and equipment manufacturers are competing to provide packages combining generation, renewables, storage and grid capacity, positioning themselves as part of the digital infrastructure of the AI economy rather than simply commodity sellers.

Inside companies, AI is reshaping operations, too. Deloitte expects more than half of digital spending in large energy firms to go into AI-enabled tools by the end of the decade, from advanced forecasting to self-optimising control systems that can anticipate failures, reroute power flows, or adjust production in real time.

Tariffs, grids, costs

Tariffs have become one of the most volatile variables in the energy business. Several major economies have floated new levies on steel, aluminium, critical minerals and energy-related equipment — materials that are core to pipelines, offshore platforms, wind turbines and LNG plants — and changes in tariff regimes can move project costs by meaningful margins in months.

Across European markets, distribution system operators are deep in discussions over their next regulatory period, sharing a common thread: meaningful uncertainty about future earnings from regulated activities. 

Until new frameworks are agreed upon, operators cannot be confident about allowed revenues or the returns they can expect on new grid assets. 

‘Efficiency, productivity, optionality’

Geopolitical tensions add their own risk premium, from territorial disputes to election-driven policy swings that can abruptly alter the environment for long-lived assets.

“Geopolitics, fluid regulation and shifting demand patterns all argue for keeping companies as agile as possible,” Ostwald adds. “Energy groups know they are good at running the business day-to-day, but history shows they are much less successful at forecasting medium- and long-term demand. That is why so much emphasis now goes on efficiency, productivity, and optionality rather than on headline volume growth.”

Nowhere is this tension more visible than in the Old Continent, where the climate and energy agenda has been progressively reshaped around a difficult balance between the climate ambition mapped out for the last two decades in policy documents and the political realism of the new “energy addition” paradigm shared by both the US administration and the Arabian Peninsula’s main producer countries.

“Even amid the rapid spread of low-emission energy sources and an acceleration in electrification, fossil fuels will continue to play a significant role in the global energy mix for decades to come,” says Marco Carta, Chief Executive Officer and Head of Utilities and Renewables Units at AGICI, a Milan-based research and consulting firm specialised in the utilities sector. “The result is a context of non-linear transition, in which the imperatives of decarbonisation, energy security, and the management of commodity market volatility must all coexist.”

A stricter financial frame

Nearly 70% of large energy companies aim to cut operating costs and sell non-core assets in 2026, using proceeds to fund priority investments without over-leveraging, according to Deloitte’s latest energy outlook. 

Roughly 40–50% of cash flow at integrated majors typically goes to dividends and buybacks, a pattern reflected in recent capital-allocation guidance from companies such as TotalEnergies. 

This forces every new project to compete not just with other investments, but against the simple alternative of returning cash to shareholders, with hurdle rates rising and uncertain projects struggling to reach a final investment decision.

One Big Beautiful Bill 

In the United States, the One Big Beautiful Bill Act has narrowed or accelerated the phase-out of some tax credits for renewables and clean fuels, while gas-fired generation, carbon capture and domestic manufacturing retain clearer support.

The International Energy Agency expects oil demand to rise by roughly 0.85–0.93 million barrels per day this year, while supply could increase by around 2.4–2.5 million barrels per day as new projects ramp up — implying a sizeable surplus and continued pressure on benchmark prices.

In LNG, softer spot prices are squeezing margins, especially for players exposed to short-term trading rather than long-term, fixed-fee contracts. 

Volumes may grow; pricing power may not.