TotalEnergies Eyes Massive Profit Windfall as Refining Margins Soar

TotalEnergies anticipates strong third-quarter earnings as the Middle East conflict has led to higher refining margins and LNG prices, the French oil and gas giant announced on Thursday. The European refining margin surged to $33.20 per barrel in Q3, up from $13.50 in Q2, and four times the $8.40 margin from Q3 last year. TotalEnergies expects downstream results and cash flow to reach "exceptional levels," with a substantial increase of $2 billion for Refining & Chemicals cash flow compared to Q2.

Their 10% increase in refining throughput will enable the company to capitalize on historically high refining margins in Europe and globally. Oil trading activities are also outperforming, maintaining strong trading profits. The Integrated LNG division is expected to see a sharp rise in results, driven by a 20% increase in average LNG prices since Q2 and the outperformance of LNG and gas trading activities in a bull market, fueled by the ongoing conflict in the Strait of Hormuz and expectations of strong winter demand.

TotalEnergies will release its full third-quarter results on October 29, the same day Shell reports its Q3 earnings. Shell recently reported that its refining margin nearly doubled sequentially to a record high, which, combined with strong trading results and high oil and gas realizations, will generate windfall profits for the UK-based supermajor.

Norwegian oil major Equinor also anticipates "unusually strong European refining margins" and optimization in third-party LNG trading to boost profits above its $400-million guidance.