TotalEnergies says lower refining margins to hit third quarter

TotalEnergies provided an update on Tuesday regarding factors that will impact its third-quarter results, citing lower refining margins and oil prices as key contributors. The French energy giant reported a sharp drop in the European Refining Margin Marker, falling to $15.4 from $100.6 a year earlier and $44.9 in the second quarter. As a result, the company anticipates a "sharp decrease" in its Downstream earnings.

TotalEnergies' shares fell by 4.0% to €59.97 in Paris, in line with declines across other major oil companies, as Brent oil prices dropped about 5% to $73.74 amid easing concerns over the Middle Eastern conflict. Brent oil averaged $80.3 during the quarter, down from $86.7 a year ago and $85.0 in the previous quarter. While oil prices were lower, average prices for gas and liquefied natural gas (LNG) increased compared to previous periods.

The company expects Hydrocarbon production to reach 2.4 million barrels of oil equivalent per day, supported by the ramp-up of the Mero 2 project in Brazil. This will help offset disruptions caused by unplanned shutdowns at the Ichthys LNG project and security-related issues in Libya.

TotalEnergies also forecasted that Exploration & Production results would reflect lower liquid prices, offset by higher gas prices. Meanwhile, Integrated LNG results are expected to exceed $1 billion, and Integrated Power performance should be similar to the previous quarter. The company will release its full third-quarter results on October 31.