TotalEnergies Braces for Earnings Hit Amid Falling Oil and LNG Prices

TotalEnergies, the French multinational energy company, announced on July 16, 2025, that its second-quarter earnings are expected to be adversely affected by a significant decline in oil and liquefied natural gas (LNG) prices, despite a modest 2.5% year-on-year increase in hydrocarbon production.

The company reported that Brent crude prices have fallen by 20%, dropping from $85 to $67.9 per barrel. This decline is largely attributed to the Organization of the Petroleum Exporting Countries and its allies (OPEC+) beginning to lift production cuts that were previously implemented to stabilize the market during periods of low demand. The increase in supply has exerted downward pressure on oil prices, which is expected to impact TotalEnergies' upstream revenue.

In addition to the decline in oil prices, TotalEnergies noted a decrease in LNG trading profits. This reduction is due to lower LNG prices and decreased market volatility compared to both the previous quarter and the same period in 2024.

Despite these challenges, the company anticipates steady downstream refined fuel sales, maintaining the $379 million performance from a year ago. Its integrated power segment is projected to earn between $500 million and $550 million, similar to the $506 million reported last year. While refining and chemical margins have slightly improved in the first half of 2025, the company's overall refining margins remain down 21% year-on-year.

The broader energy market is experiencing similar challenges. Goldman Sachs has revised its forecast for Brent crude oil prices, projecting an average of $66 per barrel for the second half of 2025, up $5 from its earlier estimate. The revision is attributed to risks of supply disruptions, reduced OECD oil inventories, and production limitations in Russia. Despite these short-term adjustments, Goldman maintained its 2026 forecasts at $56 for Brent, noting a projected surplus of 1.7 million barrels per day in 2026.

The U.S. Energy Information Administration (EIA) has also revised its 2025 Brent crude oil price forecast upward, citing increased geopolitical risk as a key driver. The average Brent crude oil price for this year is projected at $68.89 per barrel, up by over $2.90 from the previous month's estimate of $65.97. The EIA attributes the revision to a notable rise in geopolitical risk premiums following Israel's June 13 attacks on multiple nuclear and military sites, as well as civilian areas, in several Iranian cities.

TotalEnergies' announcement underscores the challenges energy companies face amid fluctuating commodity prices and changing market dynamics. The full second-quarter earnings report is scheduled for release on July 24, which will provide a more comprehensive view of the company's financial performance in this volatile environment.