TotalEnergies Profits Over $1B in Middle East Oil Trading
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy TTE?
Source: seekingalpha
- Market Dominance: TotalEnergies capitalized on wartime disruptions in March by purchasing nearly 70 crude cargoes from the UAE and Oman, resulting in over $1 billion in profits, marking one of the largest positions ever taken in oil market history.
- Price Volatility Surge: The Iranian restriction on traffic through the Strait of Hormuz led to reduced supply in benchmark contracts, causing Dubai crude prices to soar from about $70 per barrel before the conflict to nearly $170, significantly outpacing Brent crude's peak of around $120, highlighting extreme market volatility.
- Trading Activity Spike: Overall trading activity rose approximately 50% month-over-month, yet only TotalEnergies accumulated enough “partial” contracts to form full cargoes, underscoring its absolute dominance in the buyer's market and further solidifying its market influence.
- Hedging Strategy: TotalEnergies employed “paper oil” instruments, including futures, options, and swaps, to hedge its exposure to physical oil and bet on rising prices, thereby maintaining profitability in an uncertain market environment.
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Analyst Views on TTE
Wall Street analysts forecast TTE stock price to fall
16 Analyst Rating
8 Buy
8 Hold
0 Sell
Moderate Buy
Current: 91.550
Low
60.04
Averages
71.67
High
90.93
Current: 91.550
Low
60.04
Averages
71.67
High
90.93
About TTE
TotalEnergies SE is a France-based company. The Company is predominantly engaged in the business as a worldwide oil group. Its segment divisions are divided into refining and chemistry such as refining of petroleum products and manufacture of basic chemistry and of specialty chemistry, petroleum products distribution, electricity generation from combined cycle gas plants and renewable energies, gas production, trading, transport and distribution primarily includes liquefied natural gas, natural gas, biogas, hydrogen, liquefied petroleum gas and hydrocarbon operating and production. The group is also operating in trading and sea transport of crude oil and oil products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TotalEnergies Completes Merger with NEO NEXT
- Merger Completion: TotalEnergies has completed its merger with NEO NEXT, resulting in the formation of NEO NEXT+, where TotalEnergies holds a 47.5% stake, making it the largest independent oil and gas producer on the UK Continental Shelf with an expected production of over 250,000 barrels of oil equivalent per day by 2026, significantly enhancing the company's competitive position in the market.
- Strategic Commitment: This merger marks an important step in TotalEnergies' long-term commitment to the UK oil and gas sector, not only enhancing the company's cash flow generation capabilities but also fostering operational efficiencies through the synergies of the asset portfolio, thereby solidifying its market leadership.
- Historical Context: TotalEnergies has been operating in the UK for over 60 years, employing more than 1,800 people, and is expected to operate around 27% of the UK Continental Shelf's gas production by 2025, with an average daily equity production of 104,500 barrels of oil equivalent, highlighting its significant role in the energy value chain.
- Renewable Energy Strategy: TotalEnergies is deploying its Integrated Power strategy in the UK, which combines renewable energy production with flexible generation capacities, with current projects including 1.1 GW of offshore wind and 5 GW of solar under development, further advancing the company's positioning in the green energy sector.
See More
TotalEnergies Profits Over $1B in Middle East Oil Trading
- Market Dominance: TotalEnergies capitalized on wartime disruptions in March by purchasing nearly 70 crude cargoes from the UAE and Oman, resulting in over $1 billion in profits, marking one of the largest positions ever taken in oil market history.
- Price Volatility Surge: The Iranian restriction on traffic through the Strait of Hormuz led to reduced supply in benchmark contracts, causing Dubai crude prices to soar from about $70 per barrel before the conflict to nearly $170, significantly outpacing Brent crude's peak of around $120, highlighting extreme market volatility.
- Trading Activity Spike: Overall trading activity rose approximately 50% month-over-month, yet only TotalEnergies accumulated enough “partial” contracts to form full cargoes, underscoring its absolute dominance in the buyer's market and further solidifying its market influence.
- Hedging Strategy: TotalEnergies employed “paper oil” instruments, including futures, options, and swaps, to hedge its exposure to physical oil and bet on rising prices, thereby maintaining profitability in an uncertain market environment.
See More
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- Market Weakness: Energy stocks were lower on Tuesday afternoon, with the NYSE Energy Sector Index dropping 1.9%, indicating market concerns over energy demand prospects, which may lead to decreased investor confidence.
- Investor Sentiment Impact: The decline in energy stocks, driven by expectations of a global economic slowdown, could affect the financing capabilities and shareholder returns of related companies, thereby impacting overall market performance.
- Increased Sector Volatility: The drop in the energy sector may prompt investors to reassess other related industries, particularly in the context of fluctuating oil and gas prices, potentially leading to a shift of funds towards more stable investment areas.
- Uncertain Future Outlook: As concerns over energy demand intensify, investors may adopt a more cautious approach, resulting in further volatility in energy stocks in the short term, which could affect the formulation of long-term investment strategies.
See More
Energy Stocks Decline Late Monday Afternoon
- Energy Sector Weakness: The NYSE Energy Sector Index fell by 0.6% late Monday afternoon, indicating a decline in market confidence towards energy stocks, likely influenced by concerns over global economic slowdown and uncertain demand outlook.
- Market Sentiment Deterioration: The waning interest in energy stocks has led to a general decline in market sentiment, which could negatively impact the stock performance of related companies, especially ahead of upcoming economic data and earnings reports.
- Uncertain Industry Outlook: As global economic uncertainties increase, fluctuations in energy demand may adversely affect the profitability of energy companies, prompting investors to reassess their investment strategies in this sector.
- Shift in Investor Focus: Against the backdrop of declining energy stocks, investors may redirect their attention to other sectors, particularly those that tend to perform relatively well during economic slowdowns, thereby influencing capital flows.
See More
Ukrainian Drone Attacks Disrupt Russian Crude Exports
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- Severe Port Damage: Ust-Luga and Primorsk ports, which previously handled approximately 45% of Russia's seaborne crude exports totaling 1.72 million barrels per day, are now severely damaged, creating a bottleneck that threatens global oil supply.
- Deteriorating Fiscal Outlook: While global oil prices had risen due to the ongoing Middle East conflict, the inability to transport crude has severely blunted potential revenue growth, worsening Russia's fiscal outlook amid a widening budget gap.
- Structural Economic Challenges: The focus on targeting energy infrastructure indicates a shift toward industrial attrition in the war, presenting structural challenges to the Russian economy that cannot be easily mitigated through air defenses, with investors concerned about the duration of repairs at the ports, as any delays could redirect global crude flows.
See More
Energy Executives Warn of Middle East War Impact
- Oil Supply Crisis: CEOs of major energy companies warned at S&P Global's CERAWeek that the Iran war has disrupted 8 million barrels of oil and 20% of the LNG market daily, potentially leading to fuel shortages in Asia and Europe, severely impacting the global economy.
- Market Reaction Lag: ConocoPhillips CEO Ryan Lance noted that the market is not reflecting the scale of the supply disruption, with oil prices likely to remain high at $99.64 per barrel even after the conflict ends, as countries will need to restock depleted reserves.
- Geopolitical Risks Escalate: Kuwait Petroleum CEO Sheikh Nawaf al-Sabah stated that Iran's blockade of the Strait of Hormuz is not only an attack on Gulf nations but poses a threat to the global economy, potentially causing a domino effect throughout the supply chain.
- Fuel Shortages Spread: Shell CEO Wael Sawan highlighted that jet fuel and diesel prices have surged to $200 and $160 per barrel respectively, with the crisis expected to impact major Asian economies and reach Europe by April, prompting governments to stockpile and protect their supplies.
See More
TotalEnergies Completes Merger with NEO NEXT
- Merger Completion: TotalEnergies has completed its merger with NEO NEXT, resulting in the formation of NEO NEXT+, where TotalEnergies holds a 47.5% stake, making it the largest independent oil and gas producer on the UK Continental Shelf with an expected production of over 250,000 barrels of oil equivalent per day by 2026, significantly enhancing the company's competitive position in the market.
- Strategic Commitment: This merger marks an important step in TotalEnergies' long-term commitment to the UK oil and gas sector, not only enhancing the company's cash flow generation capabilities but also fostering operational efficiencies through the synergies of the asset portfolio, thereby solidifying its market leadership.
- Historical Context: TotalEnergies has been operating in the UK for over 60 years, employing more than 1,800 people, and is expected to operate around 27% of the UK Continental Shelf's gas production by 2025, with an average daily equity production of 104,500 barrels of oil equivalent, highlighting its significant role in the energy value chain.
- Renewable Energy Strategy: TotalEnergies is deploying its Integrated Power strategy in the UK, which combines renewable energy production with flexible generation capacities, with current projects including 1.1 GW of offshore wind and 5 GW of solar under development, further advancing the company's positioning in the green energy sector.
See More
TotalEnergies Profits Over $1B in Middle East Oil Trading
- Market Dominance: TotalEnergies capitalized on wartime disruptions in March by purchasing nearly 70 crude cargoes from the UAE and Oman, resulting in over $1 billion in profits, marking one of the largest positions ever taken in oil market history.
- Price Volatility Surge: The Iranian restriction on traffic through the Strait of Hormuz led to reduced supply in benchmark contracts, causing Dubai crude prices to soar from about $70 per barrel before the conflict to nearly $170, significantly outpacing Brent crude's peak of around $120, highlighting extreme market volatility.
- Trading Activity Spike: Overall trading activity rose approximately 50% month-over-month, yet only TotalEnergies accumulated enough “partial” contracts to form full cargoes, underscoring its absolute dominance in the buyer's market and further solidifying its market influence.
- Hedging Strategy: TotalEnergies employed “paper oil” instruments, including futures, options, and swaps, to hedge its exposure to physical oil and bet on rising prices, thereby maintaining profitability in an uncertain market environment.
See More
Energy Stocks Decline as NYSE Energy Sector Index Falls 1.9%
- Market Weakness: Energy stocks were lower on Tuesday afternoon, with the NYSE Energy Sector Index dropping 1.9%, indicating market concerns over energy demand prospects, which may lead to decreased investor confidence.
- Investor Sentiment Impact: The decline in energy stocks, driven by expectations of a global economic slowdown, could affect the financing capabilities and shareholder returns of related companies, thereby impacting overall market performance.
- Increased Sector Volatility: The drop in the energy sector may prompt investors to reassess other related industries, particularly in the context of fluctuating oil and gas prices, potentially leading to a shift of funds towards more stable investment areas.
- Uncertain Future Outlook: As concerns over energy demand intensify, investors may adopt a more cautious approach, resulting in further volatility in energy stocks in the short term, which could affect the formulation of long-term investment strategies.
See More
Energy Stocks Decline Late Monday Afternoon
- Energy Sector Weakness: The NYSE Energy Sector Index fell by 0.6% late Monday afternoon, indicating a decline in market confidence towards energy stocks, likely influenced by concerns over global economic slowdown and uncertain demand outlook.
- Market Sentiment Deterioration: The waning interest in energy stocks has led to a general decline in market sentiment, which could negatively impact the stock performance of related companies, especially ahead of upcoming economic data and earnings reports.
- Uncertain Industry Outlook: As global economic uncertainties increase, fluctuations in energy demand may adversely affect the profitability of energy companies, prompting investors to reassess their investment strategies in this sector.
- Shift in Investor Focus: Against the backdrop of declining energy stocks, investors may redirect their attention to other sectors, particularly those that tend to perform relatively well during economic slowdowns, thereby influencing capital flows.
See More
Ukrainian Drone Attacks Disrupt Russian Crude Exports
- Export Capability Impacted: Ukrainian drone strikes have nearly halted crude loadings at Russia's Ust-Luga port, significantly impairing the country's maritime crude export capabilities and operational capacity.
- Severe Port Damage: Ust-Luga and Primorsk ports, which previously handled approximately 45% of Russia's seaborne crude exports totaling 1.72 million barrels per day, are now severely damaged, creating a bottleneck that threatens global oil supply.
- Deteriorating Fiscal Outlook: While global oil prices had risen due to the ongoing Middle East conflict, the inability to transport crude has severely blunted potential revenue growth, worsening Russia's fiscal outlook amid a widening budget gap.
- Structural Economic Challenges: The focus on targeting energy infrastructure indicates a shift toward industrial attrition in the war, presenting structural challenges to the Russian economy that cannot be easily mitigated through air defenses, with investors concerned about the duration of repairs at the ports, as any delays could redirect global crude flows.
See More
Energy Executives Warn of Middle East War Impact
- Oil Supply Crisis: CEOs of major energy companies warned at S&P Global's CERAWeek that the Iran war has disrupted 8 million barrels of oil and 20% of the LNG market daily, potentially leading to fuel shortages in Asia and Europe, severely impacting the global economy.
- Market Reaction Lag: ConocoPhillips CEO Ryan Lance noted that the market is not reflecting the scale of the supply disruption, with oil prices likely to remain high at $99.64 per barrel even after the conflict ends, as countries will need to restock depleted reserves.
- Geopolitical Risks Escalate: Kuwait Petroleum CEO Sheikh Nawaf al-Sabah stated that Iran's blockade of the Strait of Hormuz is not only an attack on Gulf nations but poses a threat to the global economy, potentially causing a domino effect throughout the supply chain.
- Fuel Shortages Spread: Shell CEO Wael Sawan highlighted that jet fuel and diesel prices have surged to $200 and $160 per barrel respectively, with the crisis expected to impact major Asian economies and reach Europe by April, prompting governments to stockpile and protect their supplies.
See More
