TotalEnergies expects a substantial increase in its second-quarter profits, largely fueled by a surge in refining and oil trading activities. This positive outlook follows strong signals from peers like Shell and BP, which also indicated favorable results in these divisions. The company's downstream operations are projected to see a sharp rise in earnings compared to the first quarter of 2026, benefiting from higher refining and petrochemical margins, and sustained strong oil trading results. The improvement in profits is attributed to rising oil prices and tightening fuel markets in the wake of the Iran war.
Conversely, the Integrated LNG division is projected to experience a significant decrease in cash flow and results. This decline is primarily due to an underperformance in gas trading activities, which are struggling in a broadly flat to declining European market, after a strong showing in the first quarter. While the upstream results are anticipated to improve by approximately $1 billion from the first quarter, reaching nearly 2.4 million barrels of oil equivalent per day in hydrocarbon production, the weakness in LNG trading has drawn attention from analysts. JPMorgan, for instance, noted that UK peers fared better in LNG trading, raising questions about potential share buyback increases from $1.5 billion to $2 billion by TotalEnergies.
The company's shares reflected this mixed outlook, dropping by 1.9% to €69.28. Despite this immediate dip, TotalEnergies remains up about 25% year-to-date. The situation in the Middle East is improving, with the estimated impact of the Iran war on upstream output revised down to 210,000 barrels of oil equivalent per day, from the previously flagged 360,000 boed. This reduction follows the resumption of production in several Middle Eastern countries and increased output in the United Arab Emirates. However, the initial war-related disruptions, including Iran's effective shutting of the Strait of Hormuz, pushed crude oil and gas prices to multi-year highs (with Brent crude averaging around $97 per barrel in Q2 2026, up 45% year-on-year), benefiting major energy companies, including TotalEnergies' refining and oil trading segments.
