Middle East turmoil causes TotalEnergies to suspend 15% of its oil and gas output

TotalEnergies Faces Significant Output Disruptions Amid Middle East Conflict

Due to ongoing turmoil in the Middle East, TotalEnergies has seen roughly 15% of its worldwide oil and gas production halted. These affected volumes contribute about 10% to the company's upstream cash flow.

Responding to shareholder inquiries regarding its operations in the region, the French energy giant confirmed on Friday that production activities in Qatar, Iraq, and offshore UAE are either suspended or in the process of being shut down, representing a significant portion of its global output.

Despite these disruptions, TotalEnergies’ onshore operations in the UAE, where it holds a stake equivalent to 210,000 barrels per day, remain unaffected by the conflict.

The company also noted that revenue generated from Middle Eastern assets is below its portfolio average, primarily due to elevated taxes in the region. The 15% reduction in production translates to approximately 10% of upstream cash flow.

Meanwhile, the Satorp refinery in Saudi Arabia, operated in partnership with Saudi Aramco, continues to function normally, supplying the domestic market. The facility, located in Jubail, has a capacity of 460,000 barrels per day.

As a leading global LNG trader, TotalEnergies reports that the shutdown of LNG production in Qatar has only a minor effect on its LNG trading business, with an estimated impact of around 2 million tons in 2026. Most Qatari LNG is marketed by QatarEnergy.

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Qatar’s LNG Production Halt and Regional Challenges

At the onset of the conflict, Qatar announced the suspension of LNG output at Ras Laffan, the world’s largest liquefaction facility, and issued force majeure notices to customers. This move came amid drone attacks from Iran and the effective closure of the Strait of Hormuz, the sole route for LNG shipments from Qatar and the UAE to exit the region.

TotalEnergies also highlighted that rising oil prices can compensate for the loss of Middle Eastern production. An increase of $8 per barrel in Brent crude is sufficient to offset the anticipated 2026 cash flow from the affected assets in Iraq, Qatar, and offshore UAE, assuming a price of $60 per barrel.

By Michael Kern for Oilprice.com

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