about 15% total energy’ Production is offline as the war with Iran nears the one-month mark, but rising oil prices have compensated for the lost barrels, Chairman and CEO Patrick Pouyane told CNBC in an exclusive interview.
With Brent crude trading above $100 a barrel, much of the attention has turned to oil prices, but Pouyanné said the crisis is having a much bigger impact on product prices.
“The Brent market is OK, but the products market, which impacts customers… is much higher than Brent,” he told CNBC at S&P Global’s CERAWeek energy conference in Houston. The world has “never experienced” refining margins from products including Asian jet fuel at current levels, he added. In addition to petroleum products, about 30% of global fertilizer passes through the Strait of Hormuz, jeopardizing the spring planting season.
TotalEnergies is a major player in the global LNG market, including the largest exporter of US LNG. The CEO said the company can still fulfill orders from customers in Europe and Asia thanks to its diverse global portfolio.
Last week, QatarEnergy said its Ras Laffan plant suffered “extensive damage” after Iranian drone attacks, effectively taking 20% of global LNG supply offline. The shutdown has caused natural gas prices to rise in Europe and Asia.
Poyane expects prices to rise substantially if the war continues into the summer, as Asian demand increases in the summer, just as Europe looks to replenish storage. European natural gas traded at around $18 per million British thermal units on Tuesday, but Pouyane said prices could reach $40 per mmBtu by the summer if the conflict continues.
TotalEnergies is a major investor in US energy. On Monday, it reached a deal with the Trump administration to give up its offshore wind projects in exchange for $1 billion. The company instead agreed to reinvest the funds in US oil and gas projects.
The federal government is critical of offshore wind permitting, and the current administration has been a vocal critic of the industry. Pouyané said he did not want to litigate with the administration over offshore wind leases acquired under former President Joe Biden and so he approached the administration for a settlement. He said offshore wind no longer makes sense in the US given cheaper alternatives.
“In the specific situation of America, where you have a lot of land, you have a lot of gas, you have a lot of coal, you have a lot of land to build onshore solar, onshore wind, batteries, we don’t need offshore wind,” he said. “This is a frontier technology, which is not affordable.”
“I prefer to allocate my capital to technologies that are more efficient, that deliver cheaper power to customers,” he said.
As part of its expanding US portfolio, TotalEnergies recently signed a 15-year agreement Google Supplying renewable energy for data centers. Pouyané said other hyperscalers are also involved Amazon And Microsoft – Now speaking directly to TotalEnergies.
“These hyperscalers understood that an energy company – like TotalEnergies – because we not only had the ability to build, invest, own land, do business, we were a good enough partner for them,” he said.
