TotalEnergies is reported to have made more than $1 billion in profit after buying up oil cargoes across the Middle East as the Iran conflict choked shipping through the Strait of Hormuz.
The French oil giant's traders purchased around 70 cargoes of crude produced in the United Arab Emirates and Oman available to load in May - more than double its purchases in February.
The opportunity arose from a specific disruption to the way Middle Eastern oil is priced. S&P Global Platts, which runs the Dubai crude benchmark, suspended nominations of crude grades requiring transit through the Strait of Hormuz on 2 March, after major shipping companies halted passage. Three of the five crude grades normally used to set the benchmark were effectively taken out of play.
With fewer grades in play and liquidity sharply reduced, the market became far more vulnerable to a single player taking a dominant position. TotalEnergies moved into that gap. Dubai crude climbed from around $70 a barrel just before the conflict began to an all-time high of around $170 last week.
TotalEnergies chief executive Patrick Pouyanné has been candid about the scale of the disruption, if not the trading profits. He described the oil products market as "dislocated" and warned that if the conflict continues through the summer, European natural gas prices could more than double.
The company's own disclosures paint a picture of a business simultaneously hit and buoyed by the war. Production has been shut down in Qatar, Iraq and offshore UAE, representing around 15% of its total global output. However, an $8 per barrel rise in Brent crude was sufficient to offset the lost production entirely.
The surge in Dubai crude prices has hit Asian refiners hard. Some have lobbied Saudi Aramco to switch its pricing benchmark.