The price of oil surged past $114 per barrel as tensions escalated in the Middle East, creating a complex backdrop for energy giant TotalEnergies SE. While such price spikes typically benefit producers, the company faced immediate operational challenges, being forced to evacuate staff from its projects in Basra, Iraq. This move underscores the severe security risks that counterbalance potential windfalls from higher crude prices, raising questions about whether the firm’s growing renewable energy portfolio can offset such persistent geopolitical strains.
Security Concerns Disrupt Iraqi Operations
A sharp escalation in the military conflict involving a US-Israeli alliance and Iran has effectively blocked the Strait of Hormuz, a critical maritime passage for global oil supplies. Approximately one-fifth of the world’s oil transits through this channel, causing the Brent crude benchmark to jump more than 20 percent at the start of the trading week. For TotalEnergies, this environment boosts margins in its extraction business, but the cost is significant.
The company was compelled over the weekend to evacuate foreign personnel from its operations in Iraq’s Basra region. In response to drone attacks, local authorities established a crisis unit on Sunday to protect energy infrastructure. While oil field production continues for now, the volatile security situation substantially complicates long-term planning for major projects in the area.
Strategic Gains in Renewables and Africa
Despite regional instability, TotalEnergies continues to advance its strategic pivot. In a significant development for its green energy ambitions, the pilot commissioning of a first 61-megawatt unit began in Iraq on March 4. This forms part of a larger 1-gigawatt solar project. This expansion in renewables complements supply agreements finalized with Google in the United States during February, where TotalEnergies has also secured gigawatt-scale capacity.
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Positive developments in West Africa provide a counterbalance to the troubles in the Middle East. The company’s Nigerian subsidiary released its second-quarter 2026 forecast on Saturday, projecting a pre-tax profit of roughly 1.3 billion Naira. This marks a decisive turnaround from the loss-making position reported in the prior year.
Market Performance and Technical Levels
Investors have so far responded with relative stability to the mix of crisis risks and operational successes. Shares closed at 67.81 euros on Monday, trading only slightly below the 52-week high of 69.77 euros. Since the beginning of the year, the stock has advanced approximately 20 percent, ranking it among the stronger performers in the energy sector.
The near-term trajectory for the share price is likely to be dictated by developments in Iraq. Should the crisis unit in Basra succeed in stabilizing the situation, the record high could come back within reach. On the downside, the 50-day moving average at 61.19 euros serves as a key support level if geopolitical concerns derail the current rally. Further details on the security situation in Iraq, expected this coming Wednesday, are likely to determine the short-term direction.
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