French energy major TotalEnergies expects second-quarter earnings to improve, driven by higher oil prices and stronger refining margins following supply disruptions caused by the Iran conflict. The company released the outlook on Thursday ahead of its July 23 earnings report.
The U.S.-Israeli war with Iran, which disrupted exports through the Strait of Hormuz, lifted crude oil and gas prices during the April-to-June quarter, boosting returns across most of TotalEnergies’ business segments. However, the company said its liquefied natural gas (LNG) division would post significantly weaker earnings due to poor gas trading performance in a subdued European market.
TotalEnergies expects hydrocarbon production to reach nearly 2.4 million barrels of oil equivalent per day, supported by recovering output in the Middle East and higher production in the United Arab Emirates. The estimated impact of the Iran conflict on upstream production has also eased to 210,000 barrels of oil equivalent per day from 360,000 in the first quarter.
The company said higher crude prices, stronger refining margins, improved oil trading and the expansion of its European gas-fired power portfolio would lift second-quarter profits, although some gains would be limited by export disruptions and accounting effects linked to Middle East production. Shares were down 1.9% in early trading despite gaining about 25% so far this year.