Description

TotalEnergies Is Losing Oil—So Why Are Profits Rising?

TotalEnergies is facing an unusual earnings equation. The Middle East conflict has interrupted production, restricted shipping routes, damaged regional infrastructure, and left some tankers unable to exit the Gulf. Yet the same crisis has pushed energy prices higher, widened refining margins, and created unusually favorable conditions for commodity trading. The company now estimates that the conflict reduced second-quarter production by around 210,000 barrels of oil equivalent per day, an improvement from its earlier estimate of 360,000 barrels per day as offshore production in the United Arab Emirates ramped up and output restarted elsewhere. However, TotalEnergies has been unable to ship a significant portion of that recovered production. Despite these disruptions, management expects upstream cash flow to increase by approximately $1 billion from the first quarter, supported by higher prices and underlying production growth.