TotalEnergies NYSE: TTE reported first-quarter 2026 results amid what Chairman and CEO Patrick Pouyanné described as a major conflict-driven disruption to global energy markets following the closure of the Strait of Hormuz. Management said the company’s integrated model and diversified portfolio helped it capture higher prices while limiting operational and commercial fallout from shut-in Middle East production.
Middle East conflict: safety actions and operational impacts
Pouyanné said the company’s first priority since the start of the conflict on Feb. 28 was the safety of employees and their families. TotalEnergies organized evacuations from several countries in the region, and “more than 1,300 people have returned safely,” he said, thanking teams involved in the effort. He added that TotalEnergies maintained a presence alongside partners across the region, including secondees working with ADNOC joint ventures in Abu Dhabi and with QatarEnergy in Qatar.
Operationally, Pouyanné said production was shut down in Qatar, Iraq, and UAE offshore, representing about 15% of TotalEnergies’ total oil and gas output—roughly 360,000 barrels per day. CFO Jean-Pierre Sbraire noted that onshore UAE oil production continued, with sales volumes of about 210,000 barrels per day evacuated through the Fujairah terminal. Pouyanné also said the Dolphin gas system between Qatar and the UAE continued operating because it is “a domestic gulf production.”
Despite the volume impact, management said the Middle East assets contribute less cash flow per barrel than other parts of the portfolio due to higher taxation. Pouyanné said the 15% volume impact equates to roughly 10% of upstream cash flow at $60 per barrel, and that an “EUR 8 per barrel increase in the Brent is enough to offset” the expected 2026 cash flow from shut-in production—while oil prices during the crisis were cited in the EUR 100–EUR 115 per barrel range.
On refining, Sbraire said the SATORP joint venture in Saudi Arabia was damaged by strikes on April 7–8, affecting three units. No casualties were reported, and units were shut down as a precaution. A partial restart on April 14 restored production to about 50% capacity (around 230,000 barrels per day). Pouyanné later said repairs to one unit would allow output to rise above 300,000 barrels per day around early May, while repairs to two conversion units could take at least six months, possibly more, pending further assessment.
Market backdrop: price volatility and inventory drawdowns
Pouyanné and Sbraire framed the closure of the Strait of Hormuz as a major shock affecting roughly 20% of global oil, refined products, and LNG exports. Sbraire said the company observed extreme volatility in March and April, citing “8 of the 10 highest volatile days in the last 25 years” occurring during those months. He said that even if the conflict ends quickly, time lags to restart systems and move cargoes mean elevated prices could persist, adding he expected at least EUR 80 per barrel in 2026 across scenarios he had seen.
Sbraire also said the prior market expectation of a 2026 surplus had reversed, with global inventories being drawn by “10 million–13 million barrel oil per day” to balance the market. On gas, he said European prices were around EUR 15 per MMBtu, while Europe entered the storage refill season after ending winter with storage around 25%, the lowest level in five years. Pouyanné said QatarEnergy would likely wait for stabilization before restarting liquefaction plants, given the difficulty of turning facilities on and off.
First-quarter 2026 results: higher prices and operational performance
Sbraire said Brent averaged $81 per barrel in the quarter, up from nearly $64 in the prior-year period, while TTF gas averaged $13.7 per MMBtu versus $10.3 a year earlier. He said TotalEnergies’ average LNG price was $8.5 per MMBtu, reflecting typical lag effects in LNG pricing formulas. European refining margins averaged EUR 11.4 per barrel, with March described as exceptional and January-February as weak.
In that environment, TotalEnergies posted:
- Cash flow: EUR 8.6 billion, up 20% year-over-year
- Adjusted net income: EUR 5.4 billion, up more than 40%
- Return on equity: 14.4%
- ROACE: 12.7%
Sbraire attributed the performance to strong operations across the group. Upstream delivered 4% underlying production growth, which he said offset Middle East disruptions averaging about 100,000 barrels per day for the quarter—roughly 25 days of disruption in March.
In Exploration & Production, he said adjusted net operating income was $2.6 billion, up more than 40% quarter-over-quarter, while cash flow reached EUR 4.6 billion, up 26% quarter-over-quarter. He highlighted startups at Lapa Southwest (Brazil) and Mabruk (Libya), each expected to add 25,000 barrels of oil equivalent per day when ramped up. He also said operating expenses remained below EUR 5 per barrel of oil equivalent.
In Integrated LNG, Sbraire said production rose 12% quarter-over-quarter, driven by Australia returning to full capacity and growth in the U.S. and Malaysia. LNG sales were 12.4 million tons, supported by spot activity, and the segment’s adjusted net operating income increased to $1.3 billion with cash flow of $1.8 billion. He guided to an average LNG selling price of about $10 per MMBtu for the second quarter due to lagged pricing.
Integrated Power net production increased to 11.7 TWh, with 20% renewables generation growth offsetting lower utilization of gas-flexible capacity due to lower winter demand. Sbraire said TotalEnergies increased renewable capacity by nearly 8 GW over the last 12 months and remained on track to reach 42 GW gross installed capacity by year-end. He also said cash flow from operations was $0.6 billion, helped by the absence of shutdowns in the quarter.
Downstream, Refining & Chemicals benefited from high availability, with utilization at 92% due to no turnarounds and a strong contribution from trading in crude and products. Adjusted net operating income rose nearly EUR 600 million quarter-over-quarter to EUR 1.6 billion, and cash flow was EUR 1.7 billion. Marketing & Services results were described as consistently strong, with higher-margin activities offsetting lower volumes following asset disposals in Brazil and sales in Africa.
Capital allocation: dividend increase and higher buybacks
Against the backdrop of higher prices and management’s view that 2026 conditions support cash generation, Pouyanné said the board prioritized what he called the “sacrosanct dividend,” approving a 5.9% increase in the first interim dividend to EUR 0.90 per share from EUR 0.85 a year earlier.
He also said the board authorized the company to continue share buybacks toward the high end of its previously communicated range of $750 million to $1.5 billion per quarter, with TotalEnergies targeting up to $1.5 billion per quarter. Pouyanné reiterated the objective of a cash payout ratio above 40% for full-year 2026 and said buybacks would be monitored through the year. He added that deleveraging is also a priority, with the board attaching “great importance” to the balance sheet and aiming for gearing in the low teens by the end of 2026 if oil remains above $100 per barrel.
Sbraire said first-quarter working capital increased by EUR 5.1 billion, split between seasonality (EUR 2.5 billion) and higher end-of-quarter hydrocarbon prices impacting inventories (EUR 2.6 billion). Net investments were EUR 4.5 billion, and management reiterated full-year 2026 net investment guidance of EUR 15 billion. Gearing was 15.5% at quarter-end.
Project updates: Mozambique, Papua LNG, Namibia, and other milestones
On Mozambique LNG, Pouyanné reiterated a EUR 20 billion budget, citing interim costs during force majeure and inflation-driven EPC renegotiations. He said construction restarted in January, with more than 6,000 people on site, and first energy targeted for 2029. He also said overall project progress was 42% at end-March and noted the security situation in Cabo Delgado had been “quiet” and “well under control,” supported by Mozambican and Rwandan forces.
On Papua LNG, Pouyanné said multiple workstreams are advancing in parallel, including EPC, financing (including export credit agencies), discussions with the government on fiscal terms, and marketing. He said the project is targeted for sanctioning in the second half of the year, before offers expire around November.
Pouyanné also discussed Namibia, saying TotalEnergies has an agenda with the government to sanction the Venus project by end of July, while working on amendments to Namibia’s oil and gas law to reflect the needs of ultra-deepwater development. For Mopane, he described an appraisal plan with three wells to better define recoverable resources, with a potential sanction target around 2028.
Elsewhere, Pouyanné said Iraq’s Ratawi was likely moving “more to Q3 than Q2,” with the plant nearly complete but constrained by the ability to export crude under current conditions; he also said the project’s solar plant began operating before the conflict. In East Africa, he said EACOP could be completed around September or October, with oil potentially flowing from the Kingfisher project first and Tilenga production still expected in the fourth quarter.
On U.S. offshore wind, Pouyanné called the market “non-investable” given permitting timelines that can exceed political cycles and cited high subsea cable and landfall costs near New York and New Jersey. He said TotalEnergies would not return to U.S. offshore wind under the company’s current view.
About TotalEnergies NYSE: TTE
TotalEnergies SE NYSE: TTE is a French multinational integrated energy company engaged across the full energy value chain. Founded in 1924 as Compagnie Française des Pétroles, the company grew through a series of mergers and expansions—most notably with Petrofina and Elf Aquitaine around the turn of the millennium—and rebranded to TotalEnergies in 2021 to reflect a broader focus on multiple energy sources. It is organized to operate across upstream and downstream activities while pursuing a transition toward lower-carbon energy solutions.
In upstream, TotalEnergies explores for and produces crude oil and natural gas globally.
Further Reading
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider TotalEnergies, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and TotalEnergies wasn't on the list.
While TotalEnergies currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
Get This Free Report
