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TotalEnergies earnings jump on war windfall, focus shifts to LNG
The company posted $6 billion in second-quarter adjusted net income, up 67% year over year, but its LNG segment fell 22% amid flat European demand.
TotalEnergies reported second-quarter adjusted net income of $6 billion, up 67% year over year and its best quarter in nearly three years, driven largely by the Iran war. Hormuz-related disruptions pushed crude and gas prices to multi-year highs, boosting European refining margins while Middle East capacity stayed offline, according to the company. Results reflected strength across refining and chemicals, where income rose 362% to $1.8 billion, and exploration and production, where earnings climbed 64% to $3.2 billion. However, the real question is what happens when the pricing tailwind fades, with management pointing to the broader outlook for closures tied to the strait risk.
The LNG picture was weaker in the quarter, with the segment earning $807 million, down 22% compared with the prior year. TotalEnergies attributed the decline to trading underperformance alongside flat European demand, though CEO Patrick Pouyanné said prices rallied in July.
Looking ahead, TotalEnergies took a key step on LNG supply with a final investment decision for the Cronos gas field off Cyprus alongside Eni, with each holding 50%. Gas from the field, discovered in 2022, is slated to flow to Egypt for liquefaction at Damietta before export to Europe, with production starting in 2028 at about 2.8 million tons a year and aimed at helping the company work toward its 60 Mtpa LNG goal by 2030. Separately, the Financial Times reported the EU reversed an October decision that would have barred transfers of Russian LNG outside the bloc after 2026, creating an exemption tied to a Greek sanctions concession that lets TotalEnergies keep supplying Asian buyers from its 20% Yamal stake if contracts predate the February 2022 invasion and volumes remain within 2025 levels.
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