TotalEnergies Signals Stronger Q2 as Refining and Trading Offset Deferred Production

TotalEnergies Signals Stronger Q2 as Refining and Trading Offset Deferred Production The French major's quarterly preview flags downstream and trading outperformance, while E&P volumes priced at below $70 crude at end-June cap the upstream contribution. TotalEnergies expects second-quarter profit to come in above the prior quarter, driven by strong refining margins and oil trading results, the company said in a quarterly preview on Thursday (2026-07-16). The update points to a downstream and trading engine running hard since the Iran war tightened global fuel markets and pushed crude above the $60-a-barrel average most analysts had forecast for 2026.³ The upstream segment tells a more constrained story. A significant portion of TotalEnergies' production could not be lifted during the quarter and will be recognised in Exploration and Production results at the crude price prevailing at end-June, which the company noted was less than $70 a barrel. ICE Brent crude front-month stood at $87.01 on Friday (2026-07-17). Against that level, the end-June reference price of sub-$70 a barrel represents a per-barrel discount of roughly $17 on each unlifted volume booked into the E&P segment.³ The scale of the drag depends on volume, which the company has not yet disclosed. Whether the unlifted production reflects contractual liftings shifted into the third quarter or a more persistent operational shortfall will be a central detail when full results arrive.³ The trading desk had already set a high benchmark. In the first quarter of 2026, oil trading profits doubled to approximately $1 billion after TotalEnergies ran an aggressive crude acquisition strategy ahead of the Iran war. Chief Executive Patrick Pouyanné, speaking at a parliamentary hearing in Paris on Wednesday (2026-06-17), was direct about the result: "This quarter, rather than making 500 million, they made 500 million more." That framing — roughly double the typical $500 million quarterly run rate — establishes how much the trading arm has outrun its historical pace.² Refining margins added to the downstream contribution in the second quarter. Fuel markets tightened as conflict disrupted regional supply chains, and TotalEnergies' integrated structure allowed it to capture that dislocation across its trading book and refinery network.³ The broader demand picture supplied the underlying support. Non-OECD countries consumed 57.9 million barrels a day in 2025, or 56.1 percent of global demand, and grew at 2.0 percent annually. Asia Pacific alone accounted for 39.7 million barrels a day and contributed roughly half of last year's demand increase. Non-OECD countries represented about 88 percent of total global consumption growth for the year.⁴ Among the major European integrateds, TotalEnergies has been among the clearest beneficiaries of the post-war oil market. Since the war began, the company's shares have risen roughly 14 to 17 percent, broadly in line with BP and Eni. Shell has gained 4 percent over the same period. Chevron and ExxonMobil are each lower. The divergence tracks the European majors' heavier weighting toward trading-intensive, downstream-oriented business models versus the US companies' larger shale exposure.¹ The Q2 preview's real test comes when full segment numbers are published. The trading desk's Q1 performance was built on an unusually favourable crude entry point just before prices surged; replicating that with the market already elevated is harder. The deferred E&P production, priced at sub-$70 end-June crude, will weigh on segment accounts even as ICE Brent crude front-month trades at $87.01 on Friday (2026-07-17). If those unlifted volumes roll into Q3 at current prices, the gap closes quickly. If they do not, the upstream lag persists.^3,2