TotalEnergies expects a substantial increase in its second-quarter profits for 2026, primarily due to elevated energy prices stemming from the Iran war. The company indicated that its downstream operations, including refining and oil trading, are anticipated to see a sharp rise in earnings compared to the first quarter. This aligns with similar strong performances signaled by peers like Shell and BP in their respective downstream divisions.
However, the French oil major projects a significant decrease in cash flow and results from its Integrated LNG division. This downturn is attributed to an underperformance in gas trading activities amidst a broadly flat to declining European market, despite strong performance in the prior quarter. Analysts at JPMorgan noted that UK competitors fared better in LNG trading, suggesting the shortfall might be company-specific rather than a general market trend.
TotalEnergies also anticipates higher cash flows from its Exploration & Production division, roughly $1 billion more than the first quarter, benefiting from increased average liquids prices. Hydrocarbon production is expected to reach nearly 2.4 million barrels of oil equivalent per day, leveraging strong organic growth. The company also expects its Integrated Power cash flow to increase strongly due to the closing of a transaction with EPH in April.
The impact of the Middle East conflict on upstream output is estimated at 210,000 barrels of oil equivalent per day, lower than the previously guided 360,000 boed, partly due to increased production in the United Arab Emirates and the restart of operations in other regional countries during June. Despite this, a substantial portion of the increased Middle East production could not be lifted or exported due to disruptions at the Strait of Hormuz, impacting Q2 Exploration & Production results. JPMorgan analysts noted the possibility of TotalEnergies increasing its share buybacks to $2 billion from the previously stated $1.5 billion.
