French energy major TotalEnergies expects a sharp increase in third-quarter profits, supported by a near quadrupling of refining margins from a year earlier and stronger earnings from liquefied natural gas (LNG) trading as the Iran war continues to disrupt global energy supplies.
The war and the effective closure of the Strait of Hormuz have pushed oil and gas prices higher, benefiting major energy companies even as the disruption threatens supplies ahead of the Northern Hemisphere winter.
In a trading update on Thursday, TotalEnergies estimated its refining margin at USD 33.2 per barrel for the July-September quarter, compared with USD 13.5 per barrel in the previous three months and USD 8.4 per barrel in the same period in 2025.
The company’s shares rose 0.7% to 80.70 euro by Thursday 0725 GMT, outperforming the broader European energy sector, which fell 1.3%.
TotalEnergies shares have gained approximately 45.2% so far in 2026.
The outlook follows similar updates from rivals Shell and BP. Shell said last week it expected a record-high refining margin for the third quarter, while BP said on Tuesday that its refining margin was likely to triple from a year earlier.
TotalEnergies expects hydrocarbon production to have reached a maximum of 2.5 million barrels of oil equivalent per day during the third quarter.
However, the conflict has continued to affect its upstream operations.
The company estimated that the war reduced production by around 125,000 barrels of oil equivalent per day, which is equivalent to 5% of its expected output. That compares with an estimated impact of 210,000 barrels per day in the second quarter.
Despite the production losses, higher prices and stronger refining performance are expected to support earnings across the business.
TotalEnergies said downstream results were likely to reach “exceptional levels,” with cash flow from refining and chemicals expected to double from the previous quarter to approximately USD 4 billion.
Refining throughput is also expected to increase by 10% over the same period, adding to the contribution from stronger margins.
Trading activities in oil and gas are expected to provide another boost to the company’s results. TotalEnergies said average LNG prices increased by 20% during the third quarter, recovering from a previously weaker European market as buyers prepared for stronger winter demand.
Brent crude futures settled at around USD 91.30 per barrel during the quarter, while European benchmark gas prices rose almost 40% from the previous three months.
The disruption to shipping through the Strait of Hormuz has been particularly significant for LNG markets. Qatar and the United Arab Emirates, which together account for nearly a fifth of global LNG supply, have been affected by the restrictions on shipments through the strategic waterway.
The resulting supply squeeze has intensified competition for available cargoes as European buyers seek to secure fuel ahead of winter.
For major integrated energy companies, the combination of higher oil prices, stronger gas trading, and improved refining margins offers a significant earnings opportunity. However, production disruptions and the wider economic consequences of the conflict remain important risks.
TotalEnergies is among several international oil companies expected to benefit financially from the Middle East conflict, with higher commodity prices and refining margins potentially delivering billions of dollars in additional earnings across the industry.
The scale of those gains will become clearer when companies publish their full quarterly results.
TotalEnergies and Shell are scheduled to report their third-quarter earnings on October 29, followed by BP a day later.
Investors will be watching not only for the impact of higher energy prices on profits but also for updates on production losses, refining performance, and the outlook for global fuel demand as the winter season approaches.