Approximately 15% Total Energy” As the war with Iran approaches a month old, production has been halted, but rising oil prices have more than made up for lost barrels, Chairman and CEO Patrick Pouyanne told CNBC in an exclusive interview.
While much of the focus has been on oil prices, with Brent crude trading firmly above $100 a barrel, Pouyanne said the impact of the crisis on product prices is far greater.
“The Brent market is fine, but the product market that impacts customers…is much higher than Brent,” he told CNBC at S&P Global’s CERAWeek energy conference in Houston. He added that the world has “never experienced” refining margins from products including jet fuel in Asia at current levels. In addition to petroleum products, about 30% of the world’s fertilizers move through the Strait of Hormuz, putting the spring planting season at risk.
TotalEnergies is a major player in the global LNG market, including the largest LNG exporter in the United States. The CEO said that the company’s diversified global portfolio allows it to fulfill customer orders in Europe and Asia as well.
Last week, Qatar Energy announced that an Iranian drone attack had caused “severe damage” to its Ras Laffan plant, effectively cutting off 20% of global LNG supplies. The closure caused natural gas prices to soar in Europe and Asia.
Pouyanne expects prices could rise significantly if the war drags on into the summer, as demand from Asia increases over the summer as Europe works to replenish its stockpiles. European natural gas was trading at about $18 per million British thermal units on Tuesday, but Pouyanne said prices could reach $40 per MMBtu over the summer if the conflict continues.
TotalEnergies is a major investor in energy in the United States. The company reached an agreement with the Trump administration on Monday to abandon offshore wind projects in exchange for $1 billion. The company instead agreed to reinvest the money in U.S. oil and gas projects.
The federal government holds the key to licensing offshore wind power, and the current administration has been a vocal critic of the industry. Pouyanne said he approached the administration about the deal because he did not want to litigate with the administration over offshore wind leases acquired under former President Joe Biden. He added that offshore wind no longer makes sense in the United States given cheaper alternatives.
“In our unique situation in the United States, where we have a lot of land, a lot of gas, a lot of coal, a lot of land to build onshore solar, onshore wind and battery storage, we don’t need offshore wind,” he said. “This is marginal technology and not affordable.”
“I prefer to allocate funds to more efficient technologies that provide affordable power to customers,” he said.
As part of its expanding US portfolio, TotalEnergies recently signed a 15-year agreement with the US. google Provide renewable power to your data center. Pouyanne said that includes other hyperscalers. Amazon and microsoft – We are currently speaking directly with TotalEnergies.
“These hyperscalers understand that an energy company like Total Energy is a very good partner for them because we have the capabilities as well as construction, investment, land ownership and trade,” he said.
