French energy giant Total SA has become embroiled in a textbook case of market turbulence during the Middle East conflict, potentially facing massive losses. The company engaged in unprecedented buying of Middle Eastern crude oil in March, driving Asian benchmark prices to historic highs, only to trigger a market collapse when it paused its bidding activity.
According to reports, Total's trading division purchased 69 cargoes of Dubai benchmark crude through the Platts pricing window this month. This volume is remarkable considering the total annual transactions in this market for 2025 amount to only 347 cargoes. Multiple traders described the scale of buying as unprecedented in their professional experience.
This massive purchasing spree occurred against a backdrop of severely reduced market liquidity due to the conflict, pushing Asian benchmark oil prices above $170 per barrel to record levels. However, when Total temporarily suspended bidding on Wednesday, markets crashed immediately. Oman futures plummeted by $48 at one point, while Murban crude fell nearly $20.
The situation worsened as shipping through the Strait of Hormuz gradually resumed normal operations. More traders began taking positions against Total, causing Asian oil prices to decline further. Notably, supply chains across Asia—from beer and instant noodles to cosmetic containers—have faced severe disruption due to the energy crisis. Consumer panic buying of items like garbage bags and instant noodles has spread across South Korea, Japan, India, and China.
Dubai crude serves as the most important pricing benchmark in the Middle East, with major producers like Saudi Arabia and the United Arab Emirates using it as a reference. Contracts for Asian consumer nations are also heavily tied to this benchmark. Under the Platts pricing mechanism, each exchange of derivatives contracts equivalent to 25,000 barrels contributes toward physical cargoes of 500,000 barrels when 20 contracts are accumulated. Total's purchase of 69 cargoes in March alone represents approximately 20% of the market's total annual transaction volume.
Market participants told reporters that Total's aggressive bidding created intense one-sided upward pressure on prices at a time when market liquidity was already extremely constrained. The closure of the Strait of Hormuz had prevented significant volumes from Persian Gulf suppliers from reaching global markets. Shortly after the conflict began, Platts ceased including barrels from within the Gulf in its assessments, drastically reducing the volume of oil available for pricing.
Approximately one week ago, while WTI crude traded around $100 per barrel and Brent briefly surged toward $120, Asian benchmarks Dubai and Oman crude soared above $170—setting a record high for any crude oil variety globally. This created an extreme and rare divergence between Asian prices and global benchmarks. Traders noted that related contracts traded at a premium of up to $60 to Dubai swaps—an extraordinary level compared to the typical premium of just a few dollars.
Market analysts interpreted Total's buying strategy as a bet that the Middle East conflict would continue to constrain supplies in the coming months, since the cargoes being traded would not be loaded until May. However, some traders taking opposite positions stated they were not betting on the duration of the conflict but rather that prices had been driven so high by Total's bidding that short positions had become attractive short-term trades.
When Total paused bidding on Wednesday, it triggered a market collapse. The sharp declines in Oman and Murban crude were amplified by low liquidity in near-month contracts as they approached expiration. Meanwhile, growing awareness that crude shipments through the Strait of Hormuz to China, India, and Japan were gradually normalizing prompted further price declines and increased opposition to Total's market position.
This situation leaves Total in a highly vulnerable position. Analysis suggests that if the company still holds large long positions acquired at high prices, it could face margin calls that would force it to sell at any price, potentially accelerating the oil price decline. The French energy giant, which helped drive Asian oil prices to historic levels with its unprecedented buying, may now face equally historic paper losses.
Total's aggressive trading occurred during the most severe phase of Asia's energy crisis, exacerbating pressure on already fragile supply chains. Businesses and consumers across Asia are paying heavy prices for the conflict-induced energy crisis, with the region being more dependent on Middle Eastern crude, natural gas, fuel, and fertilizers than other parts of the world.
The most critical shortage involves naphtha—a key feedstock from the Persian Gulf used in plastic and petrochemical production. A South Korean plastic film factory manager reported that some raw material suppliers have raised prices by up to 50%, while others have halted supplies entirely, forcing production cuts to 20-30% of normal levels. Consumer panic buying has spread in South Korea, with supermarkets limiting purchases of garbage bags. A Japanese snack manufacturer suspended production due to shortages of heavy oil for boilers, while synthetic rubber production in China is expected to decline by about one-third in April due to the conflict.
Against this backdrop, Total's massive bidding was interpreted by the market as a deliberate attempt to squeeze short sellers—taking advantage of depleted Asian market liquidity and vulnerable supply chains to monopolize benchmark supplies and drive up oil prices to profit from war premiums. However, with the gradual normalization of Hormuz shipping and shifting market sentiment, the outcome of this high-stakes gamble may see Total paying the heaviest price for its attempt to capitalize on the conflict.
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