Large oil companies are reporting substantial earnings amid the market volatility caused by the Iran war. TotalEnergies (TTE) saw increased exploration and production earnings, and its adjusted income rose to $6 billion, partly due to the Hormuz disruption pushing crude and gas prices higher. TotalEnergies' SATORP refinery in Saudi Arabia is expected to return to full capacity by the third quarter of 2026, which could lead to further normalization.
Norwegian oil giant Equinor has also nearly doubled its profits, reporting an $11.5 billion windfall, capitalizing on the surge in oil prices stemming from the conflict. Brent crude futures for October climbed 7.5% to $87.84 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 6.5% to $87.82. The market saw a significant rebound after a previous selloff, largely driven by concerns over supply disruptions following an Iranian missile attack and President Trump's pledge for a forceful response.
Analysts are split on TotalEnergies' outlook. Piper Sandler initiated coverage with a "Neutral" rating and an $85 target, arguing shares already trade near their long-term average. In contrast, TD Cowen raised its price target to $105 from $102, maintaining a "Buy" rating, anticipating a reversal in weak gas trading. Mizuho initiated coverage with an "Outperform" rating and a $103 target, based on TotalEnergies' dual-engine hydrocarbons and low-carbon strategy.
Geopolitical tensions continue to impact oil markets. The Strait of Hormuz, a critical energy chokepoint previously handling about a fifth of global oil and LNG shipments, has seen traffic at a near standstill since March 1, 2026, due to attacks by Iran's Islamic Revolutionary Guard Corps and U.S. naval blockades. Saudi Arabia's oil exports in May were significantly down to 3.45 million barrels per day from approximately 7.28 million in February due to trade route disruptions, though the kingdom has been diverting over 70% of its crude exports via alternative Red Sea routes to bypass the Strait of Hormuz.
