Did France’s oil giant TotalEnergies attempt to profit from war by aggressively buying Middle Eastern crude in March—triggering a historic short squeeze across Asia and now facing massive losses?

Multiple traders involved in the transactions told Bloomberg that TotalEnergies’ bidding activity exerted intense one-sided upward pressure on prices amid already severely constrained market liquidity. Following the closure of the Strait of Hormuz due to the war, vast volumes of crude from the Persian Gulf were unable to enter global markets. Shortly after the outbreak of hostilities, S&P Global Commodity Insights (Platts) suspended inclusion of Gulf-origin barrels in its price assessments, sharply reducing the pool of supply available for pricing. Against this backdrop, TotalEnergies’ large-scale purchases amounted to pouring gasoline on dry kindling. Oil Price Peaks at $170: A Severe Rift Between Asian Markets and Global Benchmarks Just about a week ago, while WTI crude traded near $100 per barrel and Brent briefly spiked close to $120, Asian benchmark Dubai and Oman crude surged above $170 per barrel—setting an all-time high for any crude oil grade globally—and triggering an unprecedented extreme divergence between Asian and global benchmark prices. According to Bloomberg’s citation of trader commentary, related contracts temporarily traded at a premium of up to $60 over the Dubai swap during the pricing window—a level far exceeding the typical few-dollar premium considered unusual for crude relative to its benchmark. Market participants interpreted TotalEnergies’ aggressive buying as a bet that the Middle East conflict would continue compressing supply over the coming months—since cargoes traded at the time were not scheduled for loading until May. Yet some traders who took opposing positions against TotalEnergies stated they were not forecasting the war’s duration; rather, they believed prices had been driven so high by TotalEnergies’ bidding that short-selling became an exceptionally attractive short-term trade. Abrupt Halt: Cessation of Bidding Triggers Market Collapse Per Bloomberg, TotalEnergies’ brief pause in bidding on Wednesday broke the market. Oman futures plunged $48, and Murban crude fell nearly $20. As both contracts neared expiry, their front-month trading volume was already low; the sudden contraction in liquidity magnified price volatility. Meanwhile, an increasing number of traders realized that crude shipments to Asia (China, India, Japan) via the Strait of Hormuz were gradually returning to normal—causing Asian oil prices to fall further. More market participants consequently turned against TotalEnergies. This situation placed TotalEnergies in an extremely precarious position. ZeroHedge analysis noted that if TotalEnergies still holds substantial long positions purchased at elevated prices, margin calls could force it to liquidate those positions at any price—further accelerating the downward spiral in oil prices. The French energy major, which once pushed up Asian oil prices to a “historic level,” now risks suffering equally massive paper losses. The Cost of War Profiteering: Asia’s Supply Chains Are on the Brink of Collapse TotalEnergies’ aggressive maneuver occurred at the height of Asia’s energy crisis—its price-inflating effect further strained Asia’s already fragile supply chains. According to Reuters, businesses and consumers across Asia—from beer, potato chips, and instant noodles to toys and cosmetics—are paying a heavy price for the war-induced energy crisis. Asia is more dependent than any other region on Middle Eastern crude oil, natural gas, refined fuels, and fertilizers—and thus most vulnerable to supply disruptions. The most acutely scarce feedstock currently is naphtha—a key raw material sourced primarily from the Persian Gulf and used to produce plastics and petrochemicals, forming a foundational input for modern manufacturing.

How should multinational corporations adjust their strategies and tactics in response to the escalation and likely protracted nature of the U.S.-Israel-Iran conflict?

So how have these types of companies responded to the escalation—and the high likelihood of long-term persistence—of the U.S.-Israel-Iran conflict since March 2026? How have their multinational operating strategies and tactics in the Middle East shifted? Here, we focus specifically on the approaches adopted by multinational oil companies. First, evacuating non-essential operational personnel while maintaining a minimal presence in Gulf countries and Iraq to ensure personnel safety. It is reported that Western multinational oil companies have withdrawn all home-country staff from these nations; production and operational tasks are now entrusted to local employees or third-party international contractors. In contrast, major Chinese oil enterprises have opted to retain only the leanest, most mission-critical Chinese teams in these countries. Most international contractors, service providers, and small-to-medium-sized private enterprises have chosen to remain locally, awaiting improved conditions to resume operations promptly. Second, coordinating closely with host governments and swiftly, orderly shutting down wells and suspending production—while preserving the minimum output necessary to meet the energy needs of the oil and gas fields themselves. As introduced earlier in this article by Qingquan, many large oil and gas fields across the Middle East are operated under joint ventures or joint operating agreements led by multinational oil companies. In emergencies, these operators follow host governments’ directives regarding production cuts, shutdowns, or restarts—and this instance is no exception. However, the well shutdowns triggered by the Strait of Hormuz disruption have been unusually severe: Iraq’s output plummeted from 4.3 million barrels per day (bpd) pre-war to just 0.8–1.2 million bpd (a drop exceeding 80%); the UAE’s output fell from 3.5–4.0 million bpd to under 1.8 million bpd (a decline exceeding 50%); and Kuwait’s output dropped from 2.8 million bpd to roughly 0.5 million bpd—effectively halting operations. Third, assisting host governments in identifying alternative routes for exporting oil and gas, thereby minimizing export and sales losses. Key initiatives in this regard have emerged in Saudi Arabia, the UAE, and Iraq. Saudi Aramco oversees the operation of the 1,201-kilometer-long, dual-line, 7-million-bpd-capacity East-West Pipeline crossing Saudi Arabia—a critical alternative route during this crisis. Currently, over 4 million bpd of Saudi oil is being exported via Red Sea ports on the country’s western coast. ADNOC of the UAE, along with international oil companies and contractors operating there, are fully committed to maintaining the operation of the Habshan–Fujairah pipeline—a vital “lifeline” pipeline with a capacity of 1.5 million bpd. In northern Iraq, the Kirkuk–Turkey pipeline through the Kurdistan Region is also being urgently leveraged: the Iraqi government and BP—operator of the Kirkuk mega-field—are reportedly coordinating intensively to boost throughput. With a nominal capacity of approximately 1.1 million bpd, the pipeline currently transports only around 250,000 bpd—offering negligible relief to Iraq.

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