Energy Market Shockwaves: TotalEnergies CEO on War, Prices, and a U.S. Pivot
The ongoing conflict involving Iran has already removed roughly 15% of TotalEnergies’ production from the market, according to Chairman and CEO Patrick Pouyanné. In an exclusive interview with CNBC at S&P Global’s CERAWeek conference in Houston, Pouyanné revealed that while surging oil prices have offset the lost barrels, the crisis is triggering a more severe and widespread impact on consumer-facing energy products and global supply chains.
The Product Price Crisis: Beyond Brent Crude
While Brent crude trading above $100 per barrel dominates headlines, Pouyanné stressed that the real pressure is on refined products. “The Brent market is ok, but the products market, which is the one which impacts customers … is much higher than Brent,” he stated. He described current refining margins for products like Asian jet fuel as historically unprecedented, a direct consequence of disrupted supply flows through critical chokepoints like the Strait of Hormuz. This strait is also vital for global trade, with about 30% of the world’s fertilizer shipments passing through it, threatening the upcoming spring planting season and adding food security concerns to the energy crisis.
LNG Market in Turmoil After Qatar Attack
The shockwaves extend to the liquefied natural gas (LNG) market. Following Iranian drone attacks that caused “extensive damage” to QatarEnergy’s Ras Laffan plant—a facility responsible for about 20% of global LNG supply—prices in Europe and Asia have surged. Pouyanné cautioned that if the conflict persists through the summer, prices could climb dramatically higher. European natural gas, currently around $18 per million British thermal units (MMBtu), might reach $40/MMBtu as seasonal Asian demand rises concurrently with Europe’s urgent need to refill storage reserves for next winter.
Despite the Qatar disruption, Pouyanné expressed confidence that TotalEnergies, a major player and the largest exporter of U.S. LNG, can meet its contractual obligations in Europe and Asia. He credited this resilience to the company’s globally diversified portfolio, which allows for flexible redirection of cargoes.
A Strategic U-turn: Abandoning U.S. Offshore Wind
In a significant strategic shift, TotalEnergies announced a deal with the Trump administration to abandon its U.S. offshore wind projects in exchange for $1 billion, which will be reinvested into domestic oil and gas operations. Pouyanné explained the decision as a pragmatic response to the current U.S. policy landscape and economic realities. He argued that with abundant onshore resources—land, gas, coal, and space for solar and wind—offshore wind is no longer competitive. “In the specific situation of the U.S., 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 to have offshore wind,” he said, calling it a “marginal technology, which is not affordable.” The CEO emphasized a capital allocation strategy focused on “technologies which are more efficient, which give affordable electricity to customers.”
Powering the AI Boom: A New Partnership Model
While stepping back from one renewable sector, TotalEnergies is aggressively pursuing others. The company recently secured a landmark 15-year agreement to supply renewable power to Google‘s data centers. Pouyanné indicated this is the beginning of a broader trend, with other tech “hyperscalers” like Amazon and Microsoft now in direct talks with TotalEnergies. He framed the energy giant as a uniquely capable partner for these power-hungry companies: “These hyperscalers have understood that an energy company – like TotalEnergies – because we have also capacity, not only to build, to invest, to have land, to trade, we were quite a good partner for them.” This model leverages TotalEnergies’ integrated capabilities—from generation to trading—to provide the scalable, reliable, and increasingly clean power required for the AI and data center expansion.
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