Total SA reported first-quarter earnings on Wednesday, revealing a significant year-over-year profit increase driven by soaring oil and gas prices and a strong performance from its trading division. The company also announced an increase in its share buyback program and quarterly dividend. This move highlights the substantial cash flow and shareholder return capabilities of major oil companies amid ongoing geopolitical tensions in the Persian Gulf that continue to disrupt energy supply chains.
The company's adjusted net profit for the first quarter reached $5.39 billion, a 29% increase compared to the same period last year, significantly surpassing the average analyst estimate of $4.98 billion. Concurrently, Total SA raised its quarterly dividend from €0.85 to €0.90 per share. In terms of shareholder returns, the company plans to buy back up to $1.5 billion of its shares in the second quarter, doubling the first-quarter target of $750 million and hitting the top end of its previously guided range.
CEO Patrick Pouyanné stated that robust cash flow generation and a solid balance sheet provide the foundation for enhancing shareholder returns. In February, Total SA had projected full-year buybacks of $3 billion to $6 billion based on an oil price range of $60-$70 per barrel. Since the escalation of geopolitical conflict, Brent crude prices have surged above $100 per barrel, generating substantial excess profits for the company.
Pouyanné noted that the liquefied natural gas trading business successfully capitalized on opportunities arising from market volatility, while the crude oil and petroleum products trading division also delivered a "very strong performance" in March. However, physical production was impacted by the conflict. Since the outbreak of hostilities in late February, Total SA was forced to suspend some oil and gas production operations around the Persian Gulf. As of the end of April, shutdowns at offshore fields in Qatar, Iraq, and the UAE collectively accounted for approximately 15% of the company's total output.
Despite these disruptions, overall oil and gas production for the quarter remained largely flat year-over-year, supported by the start-up and ramp-up of new projects in countries like Brazil and Libya. Excluding the impact of the conflict, production actually increased by about 4%.
Refining capacity is expected to decline in the second quarter. Following damage from an attack that led to the shutdown of the Satorp refinery in Saudi Arabia—a joint venture with Saudi Aramco—and a planned two-month maintenance period at the Donges refinery in France, Total SA anticipates its refinery utilization rate will be between 80% and 85%, down from over 90% in the first quarter.
Financially, the company's gearing ratio—net debt to equity excluding leases—edged up to 15.5% at the end of the first quarter from 14.7% at the end of last year. The decision to increase shareholder returns may attract attention from French politicians, as the government faces pressure to protect consumers and businesses from soaring fuel prices. Meanwhile, Total SA reaffirmed its net investment plan of $15 billion for 2026 and stated it is evaluating options to accelerate "short-cycle investments" to fully leverage the current high oil and gas price environment.
Total SA has demonstrated strong profit resilience and cash conversion capabilities in a volatile geopolitical and energy market. However, the temporary decline in refining capacity and potential risks of political intervention remain variables to watch in the coming quarters.
The trading business has helped offset production losses, and performance among European energy giants has diverged. Since the conflict began in late February, global energy majors have generally benefited from oil prices surging above $100 per barrel, but their financial results and strategic choices show variation.
BP reported earnings on April 28, with underlying replacement cost profit for the first quarter soaring 113% year-over-year to $3.2 billion, well above the average analyst forecast of $2.64 billion. Net profit attributable to shareholders jumped to $3.84 billion from $687 million a year earlier. CEO Meg O'Neill attributed the strong results to "exceptional" contributions from oil trading against the backdrop of the war's impact on global energy markets.
Shell is scheduled to formally release its first-quarter results on May 7, but an earlier trading update provided a clear preview. Due to the conflict affecting core assets at the large Ras Laffan complex in Qatar, Shell was forced to lower its first-quarter LNG production guidance. However, while production suffered, Shell's trading division acted as a key earnings stabilizer. The geopolitical crisis created "dislocation" in global oil supply systems and increased market volatility, presenting excellent arbitrage opportunities. Shell expects its oil trading performance to be "significantly higher" than in the previous quarter, effectively offsetting financial losses from force majeure events affecting production.
ExxonMobil is also set to report first-quarter earnings. An update released in early April presented a mixed outlook: although soaring oil prices could boost upstream profits by up to $2.9 billion, more than offsetting some production disruptions in the Middle East, the company warned that overall profit might decline compared to the previous quarter.
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