At $60 oil, who is happy and who is worried?

Due to low oil prices, Kpler has downgraded its forecast for U.S. crude supply growth for the remainder of 2025 and throughout 2026 by 120,000 barrels per day to 170,000 barrels per day—'because weak pricing may slow shale output,' according to Kpler analysts. 'With WTI—the U.S.'s primary benchmark crude—now approaching the breakeven level for new wells, producers may scale back drilling.' U.S. shale producers react most swiftly to oil price changes, typically aligning their activity rapidly with price trends. Although recent activity has remained stable, Kpler believes declining margins will prompt the U.S. oil industry to remain cautious. OPEC+’s latest moves—both to compete for market share and constrain U.S. shale output—are pressuring U.S. crude production, which is expected to peak in 2025 before gradually declining. International oil majors demonstrate strong resilience to low oil prices. Unlike sovereign nations that import or export oil, international oil majors—key players in the global oil market—exhibit considerable resilience to fluctuations in international oil prices, with the 'Big Five' multinational oil companies being the most representative. Even as softer oil prices lead to more oil entering the market, major oil companies have no plans to cut budgets. In a bearish environment, this may sound reckless—but it is far from it. With Asian demand rebounding and OPEC+ preparing to unwind production cuts faster than anticipated, ExxonMobil, Chevron, Shell, and TotalEnergies are all preparing to increase—not reduce—their output. In Q1 2025, ExxonMobil’s net profit declined from $8.2 billion year-on-year to $7.7 billion; Chevron’s profit dropped sharply from $5.4 billion to $3.8 billion; Shell’s quarterly profit fell by 28%. TotalEnergies reported a relatively modest 5% decline in profit. Yet none of these companies signaled any intention to cut spending or retreat strategically. In fact, they are doing the opposite: raising production targets and sticking to growth plans. Driven by increased output from Brazil, the U.S., Malaysia, and Argentina, TotalEnergies’ Q1 2025 oil and gas production rose 4%; ExxonMobil aims for 7% production growth in 2025; Chevron targets 9%. Even the comparatively conservative Shell continues aggressive share buybacks and refuses to compromise on capital expenditures. The only supermajor adjusting its plan is BP—prompted by pressure from Elliott Management. The activist investor Elliott Management has urged BP to further cut costs and establish a clearer strategic direction. BP’s Q1 2025 earnings missed expectations, cash flow declined, and net debt rose—making it an outlier among peers otherwise standing firm. Against this backdrop, the world’s largest international oil and gas companies continue to uphold their dividend policies, as most have met or exceeded analyst consensus for Q1 2025 profits. In Q2 2025, BP and Chevron slowed their share repurchase pace. Though oil prices plunged early in the quarter, ExxonMobil, Shell, and TotalEnergies maintained their buyback policies.

TotalEnergies (TTE): In-depth Investment Value Assessment — October 12, 2026

Twenty-Three. Buffett-Style Final Verdict Assessment Dimension Verdict Core Question TotalEnergies (TTE) is a diversified energy listed company with core businesses spanning oil, natural gas, renewable energy, and electricity. In 2025, it achieved revenue of USD 182.34 billion (down 6.78% YoY) and net profit of USD 13.13 billion (down 16.70% YoY). In Q1 2026, net profit reached USD 5.81 billion (up 51% YoY); adjusted net profit was USD 5.4 billion (up 29% YoY); oil & gas production stood at 2.553 million barrels of oil equivalent per day. In H1 2026, adjusted net profit totaled USD 11.4 billion (up 47% YoY); net profit reached USD 11.2 billion (up 72% YoY); adjusted EBITDA amounted to USD 25.7 billion (up 27% YoY). Its current P/E ratio stands at 10.96x; forward P/E at 8.04x; P/B at 1.49x; dividend yield at 4.61%. GuruFocus’ authoritative system assigns a GF Score of 67/100 and estimates GF Value at approximately USD 61.46 (indicating significant overvaluation), with seven warning signals. Over the past 90 days, ten institutions issued ratings: five Strong Buy, one Buy, and four Hold; the average target price is USD 98.55. Amid the interplay between positive drivers—'integrated full-value-chain advantage + long-term production growth targets + continuously optimized shareholder return policy'—and core contradictions—'GuruFocus’ designation of 'significant overvaluation' + seven warning signals + production losses due to Middle East geopolitical conflict + declining performance in the integrated LNG segment'—TotalEnergies, as a global integrated energy leader, boasts pronounced full-value-chain integration advantages, delivered robust H1 2026 results, maintains clear long-term production growth targets, and continues optimizing its shareholder return policy. Recommendation: Neutral-to-cautious. Consider phased accumulation on dips within the USD 78.00–82.00 range, positioning for medium- to long-term holding to capture dual compounding benefits from rising energy price floors and company production growth—while remaining highly vigilant toward GuruFocus’ 'significant overvaluation' assessment, the seven warning signals, and Middle East geopolitical risks. Business Quality 🟢 Good. H1 2026 adjusted net profit up 47%; operating cash flow USD 18.4 billion (+35%); capital gearing ratio reduced to 13.1%; ROE 14.48%; ROIC 10.27%. However, GuruFocus GF Score is 67/100, below its 10-year median of 77. Moat Strength 🟢 Strong. Its moat rests on four pillars: 'integrated full-value-chain + LNG leadership + production growth + shareholder returns.' Its five business segments effectively hedge against price volatility; it ranks as the world’s second-largest LNG operator; targets average annual production growth of 4% through 2030. Management 🟢 Strong strategic execution capability. The company continues advancing along both integrated full-value-chain development and energy transition pathways. At its September 2026 Investor Day, it reaffirmed its 2030 growth targets; the Board approved a new shareholder return policy. Patrick Pouyanné remains Chairman and CEO. Profitability 🟢 Substantially improving. H1 2026 adjusted net profit up 47%; net profit up 72%. Its integrated full-value-chain model effectively hedges regional market volatility. However, the integrated LNG segment’s performance declined; full-year 2025 net profit fell 16.70% YoY. Price vs. Value 🟡 Significant divergence. Current P/E ~10.96x; forward P/E ~7.23x—within a reasonable, slightly low industry range. Yet GuruFocus’ GF Value stands at only USD 61.46 (indicating significant overvaluation), with seven warning signals and momentum ranking just 1/10. Margin of Safety 🟡 Moderate. Price margin of safety is average (P/E 10.96x + GF Value overvalued by ~40%); business model margin of safety is moderately high (integrated full-value-chain); asset margin of safety is solid (P/B 1.49x, ROE 14.48%); cash flow margin of safety is solid (operating cash flow USD 18.4 billion). Overall margin-of-safety level is significantly impacted by GuruFocus’ 'significant overvaluation' assessment, the seven warning signals, and extremely low momentum ranking. Certainty 🟡 Moderate: strong earnings growth but elevated valuation and geopolitical risks. **TotalEnergies’ operational certainty primarily stems from:** ① integrated full-value-chain advantage; ② robust H1 2026 performance; ③ clearly defined long-cycle production growth targets; ④ continuously optimized shareholder return policy. Short-term uncertainties include energy price trajectory, Middle East geopolitical conflict, and recovery of integrated LNG segment performance; long-term outcomes hinge on actual delivery of production growth and valuation normalization.

Soaring freight rates add $5.4 billion to Shell's debt, squeeze Total's margins

2 days ago

Shell reported a $5.4 billion increase in shipping lease costs adding to its net debt, while TotalEnergies saw liquid fuel price realization drop by $6 per barrel due to soaring freight rates between the Middle East and China.

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