Key facts
- TotalEnergies' first-quarter net profit rose 51% to $5.8 billion.
- Higher oil prices, influenced by the Middle East war, were a key driver of profit growth.
- The company's oil and gas production increased by 4% in the quarter.
- TotalEnergies' trading arm reported a very strong performance.
- The surge in profits has reignited debate in Europe over windfall taxes on energy companies.
French oil and gas major TotalEnergies announced a significant 51% surge in first-quarter net profit, reaching $5.8 billion. This increase was primarily attributed to higher oil prices driven by the ongoing conflict in the Middle East, which has disrupted global energy markets. The company highlighted its strategic trading operations and a 4% rise in oil and gas production across regions like Brazil, Libya, and Australia as key factors in offsetting losses in other areas, particularly the Gulf region.
TotalEnergies' traders reportedly purchased an unprecedented volume of crude oil cargoes from the UAE and Oman in March, underpinning the Middle East's Dubai benchmark. This aggressive buying strategy, occurring as US-Israeli attacks on Iran led to the closure of the Strait of Hormuz and sent oil prices soaring, is estimated to have generated over $1 billion in profit for the company. Brent crude futures saw a notable increase, trading at $114.93.
The company's strong financial performance has reignited political debate in Europe regarding windfall profit taxes on energy companies. French Prime Minister Sébastien Lecornu indicated an openness to the idea, suggesting that exceptional results raise questions about exceptional redistribution, potentially through fiscal means. In response, TotalEnergies stated it is already redistributing profits by capping prices at its French service stations. The company also announced a dividend increase to 0.90 euros per share and a partial restart of its Satorp refinery in Saudi Arabia.
Climate groups and consumer advocates criticized the profits, linking them to continued dependence on fossil fuels and the impact of high energy prices on households. Meanwhile, ExxonMobil, another major energy company, also saw its market value increase significantly amid the conflict.