In a trading update on Wednesday, TotalEnergies said that while its hydrocarbon production is expected to rise by around 2.5% year-on-year, this increase won’t be enough to offset the impact of sharply lower commodity prices.
Oil Prices Slide as OPEC+ Unwinds Cuts
A key headwind for the company is the fall in Brent crude prices. The benchmark averaged just under $68 per barrel in Q2 2025, down about 20% from $85 a year ago.
Prices have been pressured by OPEC+ — a group comprising the Organization of the Petroleum Exporting Countries and allies such as Russia — starting to unwind their voluntary production cuts of 2.17 million barrels per day from April.
While the move aims to stabilize long-term market share, it has added short-term supply, pushing prices lower and eroding upstream earnings for producers like TotalEnergies.
LNG Trading Hit by Lower Prices, Volatility
The company also flagged a weaker performance in its liquefied natural gas business. Lower LNG prices and reduced market volatility, which had previously benefited trading desks, mean TotalEnergies’ traders earned less than both the first quarter of this year and the same period in 2024.
This softer trading environment follows a volatile period for global LNG markets in the aftermath of supply disruptions and surging demand in recent years.
Downstream and Refining Outlook Mixed
TotalEnergies expects its sales of refined fuels in the downstream segment to remain flat versus a year ago, when the division brought in $379 million.
Refining and chemicals earnings, meanwhile, will be mixed. The company sees a slight increase in refining margins over the first half of 2025 but says overall its refining margin is still down 21% compared to a year ago.
These trends mirror broader industry challenges as demand patterns shift, input costs fluctuate, and competition in refining remains intense.
Power Business Holds Steady
One relatively stable area is TotalEnergies’ integrated power division, which is expected to deliver between $500 million and $550 million in earnings for the quarter, roughly in line with the $506 million recorded a year earlier.
This segment reflects the company's growing push to diversify into lower-carbon energy sources and more predictable, regulated returns as part of its transition strategy.
Analyst Reaction and Earnings Date
Despite the guidance for lower overall profits, market reaction was muted. TotalEnergies’ shares were up slightly — 0.06% at 0923 CET — on Wednesday morning. Analysts at Jefferies said the earnings preview was largely in line with consensus expectations.
The company is scheduled to release its detailed second-quarter results on July 24, when investors will get a fuller picture of how TotalEnergies is navigating the shifting energy landscape.
This measured outlook follows a broader industry trend. Last week, BP flagged weaker oil and gas sales, while Shell warned investors of lower gas trading earnings and headwinds in its chemicals business — underscoring the challenges all energy majors face in balancing traditional hydrocarbon production with new market realities.