TotalEnergies Reports Record H1 2026 Earnings Boosted by High Oil Prices and Diversified Energy Portfolio

Record H1 Earnings Driven by Elevated Hydrocarbon Prices Amid Middle East Conflict

TotalEnergies' financial results for the first half of 2026 were significantly boosted by high hydrocarbon prices resulting from the Middle East conflict. Leveraging its integrated business model, the company achieved a record adjusted net income of $11.4 billion, a 47% increase year-over-year. CEO Patrick Pouyann e9 highlighted the company’s ability to capitalize on its diversified portfolio in this high-price environment.

Brent crude averaged $92.3 per barrel in Q2 2026, up 28% from $71.9 in Q1. This price surge benefited the Exploration & Production segment, which saw adjusted net operating income rise 25% quarter-on-quarter to $3.2 billion. Liquids prices increased by $17.9 per barrel compared to Q1, although a larger off-take at quarter-end in a bearish market limited full gains. Upstream operating costs remained steady at $5 per barrel, reflecting operational efficiency amid volatility.

Middle East Conflict Causes 210 kboe/d Production Losses Offset by Organic Growth

The Middle East conflict caused an average production loss of 210 thousand barrels of oil equivalent per day in Q2, due to restricted access to the Strait of Hormuz and related geopolitical challenges. This impacted the company’s liquefied natural gas operations in Qatar, contributing to a 9% quarter-on-quarter decline in the Integrated LNG segment.

However, organic production growth of over 4% year-on-year from projects such as Mero-4 and Lapa SW in Brazil, Ballymore in the US, and Mabruk in Libya helped offset these disruptions. Excluding the Middle East impact, production growth exceeded 4%, reflecting successful project execution and geographic diversification.

Downstream Refining and Chemicals Segment Posts $1.8 Billion Adjusted Operating Income

The Refining & Chemicals segment delivered strong earnings in Q2, with adjusted net operating income soaring to $1.8 billion—nearly five times the $390 million recorded in Q2 2025. This was driven by the European Refining Margin Marker rising to $13.5 per barrel from $4.7 per barrel a year earlier, reflecting improved refining economics. The segment’s cash flow from operations excluding working capital doubled to $2.03 billion despite planned and unplanned refinery disruptions.

Refinery throughput was 1,426 thousand barrels per day in Q2, down 12% from Q1, as the company prioritized distillate production to capitalize on higher margins. Operational challenges included maintenance at the Donges refinery in France, disruptions at Saudi Arabia’s SATORP facility, and a tropical storm shutdown at Port Arthur, USA.

Integrated LNG Segment Faces Challenges from European Gas Trading and Qatar Production Losses

The Integrated LNG segment’s adjusted net operating income declined 39% quarter-on-quarter to $807 million in Q2, impacted by weaker gas trading performance and production disruptions. European gas prices (TTF index) averaged $14.7 per MWh in Q2, up 14% from Q1, creating a challenging trading environment.

Qatar LNG production fell 9% quarter-on-quarter due to shut-ins linked to the Middle East conflict. Nevertheless, TotalEnergies expanded its LNG footprint with the ECA LNG project start-up in Mexico and secured long-term oil-indexed LNG contracts with Chugoku Electric Power (Japan) and Hangzhou Gas (China), reinforcing stable demand in Asia.

Integrated Power Segment Grows Capacity and Achieves 26% Annual Production Increase

The Integrated Power segment reported net electricity production of 14.8 terawatt-hours in Q2, a 26% increase year-on-year. This growth was supported by the April 29, 2026 acquisition of a 50% stake in flexible power assets from EPH across the UK, Italy, the Netherlands, and France. EPH assets contributed about 60% of the segment’s $721 million cash flow from operations excluding working capital.

Renewable capacity reached 37.4 gigawatts by the end of Q2, up roughly 8 gigawatts year-on-year. Key milestones included the Final Investment Decision for the 1 GW Mirrny onshore wind farm in Kazakhstan and construction start on a 440 MW solar plant in the Philippines, targeting 2027 commissioning. Adjusted net operating income remained steady at $533 million quarter-on-quarter amid ongoing asset integration.

Marketing & Services Segment Earnings Jump 91% Year-on-Year Amid Margin Gains

The Marketing & Services segment posted adjusted net operating income of $500 million in Q2 2026, up 91% from Q2 2025. This was driven by favorable seasonal trends in Europe and improved unit margins on petroleum sales. Cash flow from operations excluding working capital rose 19% year-on-year to $847 million.

Total petroleum product sales declined 8% year-on-year to 1,213 thousand barrels per day, affected by the sale of the Burkina Faso retail network and reduced demand due to elevated energy prices. European sales fell 6% to 732 thousand barrels per day, while sales outside Europe dropped 8% to 481 thousand barrels per day. The company maintained price caps on gasoline and diesel in France during the Middle East conflict to protect consumers and support brand loyalty.

Robust Cash Flow and Improved Balance Sheet Enable Dividends and Deleveraging

TotalEnergies generated $18.4 billion in cash flow from operations excluding working capital in H1 2026, a 35% increase year-on-year. Q2 contributed $9.8 billion, a 14% sequential rise from Q1's $8.6 billion. Net investments totaled $7.9 billion in H1, down 31% from $11.6 billion in H1 2025, in line with the $15 billion annual guidance. The company reduced net debt by $3.3 billion in Q2, lowering the gearing ratio from 15.5% at Q1-end to 13.1% at Q2-end.

The Board approved a second interim dividend of e0.90 per share for 2026, up 5.9% year-over-year, reflecting confidence in earnings and cash flow. It also authorized $1.5 billion in Q3 share buybacks. In H1, 26.3 million shares were repurchased for $2.25 billion, with 16.9 million shares bought in Q2 for $1.5 billion. The company prioritizes dividends and deleveraging to maintain financial strength amid commodity cycles.

Return on Equity Hits 15.9% as Integrated Model Drives Shareholder Value

TotalEnergies’ return on equity for the 12 months ending June 30, 2026, reached 15.9%, reflecting strong profitability from its integrated business model during elevated commodity prices. This demonstrates effective capital deployment across upstream, midstream, renewables, and downstream operations. The combination of record adjusted net income and strong cash flow validates the company’s strategic portfolio and geographic diversification.

The effective tax rate was stable at 39.3% in Q2 versus 39.1% in Q1. The diluted weighted average shares outstanding were 2,216 million in Q2 and 2,187 million in H1, with buybacks reducing share count by about 2%. Adjusted earnings per share rose 51% year-on-year to $5.14 in H1, reflecting organic growth and disciplined capital management.

Strategic Upstream Projects Enhance Long-Term Production Sustainability

In H1 2026, TotalEnergies advanced key upstream projects to support production and earnings amid the energy transition. The company acquired a 10% stake in Abu Dhabi’s Bab Gas Cap concession and approved the Umm Shaif Gas Cap project, targeting over 600 million cubic feet per day of gas production by 2030 with associated condensate monetization. These investments diversify the Middle East portfolio and secure long-term production.

Exploration efforts included agreements with the Syrian Petroleum Company for offshore blocks and Egypt’s General Petroleum Corporation for offshore exploration. In Malaysia, TotalEnergies sold a non-operated interest in the Marjoram gas field for $1.388 billion, optimizing its portfolio. Ongoing ramp-up of projects in Brazil, Angola, the US, and Libya supports sustainable production growth despite Middle East conflict challenges and natural decline rates.

Environmental Initiatives and Digital Investments Support Energy Transition Goals

TotalEnergies reduced Scope 1 and 2 greenhouse gas emissions from operated facilities to 15.1 million tonnes CO2 equivalent in H1 2026, down 8% quarter-on-quarter to 7.3 million tonnes. The company launched MethaneLive, a global methane emissions monitoring center aimed at reducing fugitive emissions. Methane emissions fell 27% year-on-year to 8 kilotonnes CO2 equivalent in H1.

The company also signed a deal with Dell Technologies and NVIDIA to build Pangea 5, a 150-petaflop supercomputer supporting digital transformation, reservoir modeling, trading, and energy transition analytics. Additionally, TotalEnergies provided a $200 ( e2200 in Europe) fuel bonus to its 100,000 employees worldwide to mitigate the impact of high energy prices.