Strait of Hormuz: A Vital Lifeline Under Pressure

Patrick Pouyanne, CEO of TotalEnergies, confirmed on Wednesday that the French energy giant will not resume its upstream oil and gas operations in the Middle East until the shipping transit through the Strait of Hormuz achieves genuine stability. This vital maritime artery, through which a significant portion of the world’s oil transits, has been experiencing considerable disruption.

Approximately 15% of TotalEnergies’ global upstream oil and gas production is currently offline. The company faces severe challenges in shipping its cargoes through the Strait, a situation exacerbated by the ongoing conflict in the region. While higher global oil prices and increased output from other regions have somewhat mitigated TotalEnergies’ financial losses in the Middle East, the operational hurdles remain substantial.

The severity of the situation is highlighted by the fact that nine of TotalEnergies’ chartered tankers remain stranded within the Strait. A recent incident saw a second tanker, attempting to exit the Gulf, forced to retreat after an Indian vessel ahead of it was reportedly attacked. This alarming event led to the TotalEnergies tanker losing its crucial insurance cover, further complicating transit.

CEO Pouyanne emphasized the logistical complexities involved in resuming operations: “We will wait for a real stabilisation in the Strait of Hormuz before restarting operations. Before the war you had 50 oil tankers moving out of the Gulf every day.” He further elaborated, “Restarting the wells is not complicated, but you need to first let the full tankers out and offload somewhere, then bring in empty tankers to reload. Trips to Asia are 25 days, longer to Europe, and for LNG the global fleet is smaller… This is why we say it will take 2-3 months.” This timeline reflects the significant challenges posed by the current environment.

Regional Projects Demonstrate Resilience

Despite the immediate challenges in shipping, TotalEnergies maintains its commitment to key development projects across the Middle East, signaling long-term confidence in the region’s energy potential:

• Saudi Arabia: The SATORP refinery, co-owned by TotalEnergies, is back online and is projected to ramp up its output to over 300,000 barrels per day next month. Furthermore, the ambitious $5 billion Amiral petrochemical complex project is 70% complete, with operations expected to commence by late 2027 or early 2028.
• Qatar: The North Field East gas expansion, a cornerstone project, is anticipated to experience a maximum delay of two months, with initial offloading now projected for late 2026 or early 2027.
• Iraq: A solar plant has successfully begun operations, and the first phase of the Ratawi oilfield expansion is slated for later this year.

These ongoing projects underscore the enduring strategic importance of the Middle East in the global energy landscape, even as the region navigates complex geopolitical dynamics.