Behind Big Oil’s Q1 Beat

Europe’s top oil companies owed a meaningful slice of their first-quarter earnings surprises to their trading divisions, CNBC reported Tuesday, spotlighting a commercially sensitive business line that rarely attracts investor attention.

Trading Units Step Into the Spotlight

TotalEnergies CEO Patrick Pouyanné said crude and refined-products trading delivered “a very strong performance in March.” The French major posted quarterly net income of $5.4 billion, a 29% jump year-on-year. Shell CFO Sinead Gorman flagged “significantly higher” trading and optimization contributions. Shell’s first-quarter adjusted earnings reached $6.92 billion, up from $5.58 billion a year earlier. BP cited “exceptional” oil trading results as it reported net profit of $3.2 billion, more than doubling its year-ago figure.

Estimates from five analysts, cited by the Financial Times, suggested the trio’s trading arms collectively generated between $3.3 billion and $4.75 billion in additional profit versus the fourth quarter of 2025.

What Oil Trading Desks Actually Do

These divisions buy, sell and physically move crude and gas around the world. They also hedge price exposure and generate revenue independent of upstream production. Major oil companies typically keep trading profits off their public disclosures, which can make the unit’s earnings contribution invisible to outside investors.

Equity analyst Maurizio Carulli of Quilter Cheviot Investment Management told CNBC the activity is grounded in real commodity flows. Companies move barrels they either produce or have physical access to via owned or contracted ships and terminals. “It is a ‘proper and long-term activity,’ not financial speculation,” Carulli said.

Volatility Was the Catalyst

The first quarter was unusually turbulent for energy markets. Disruption at the Strait of Hormuz during the Iran conflict rattled oil benchmarks throughout March. Trading desks are designed to profit during exactly those conditions, according to Allen Good, director of equity research at Morningstar. Good noted the same dynamic played out in 2022 when Russia’s invasion of Ukraine sent prices swinging.

Also Read: Oil Prices Whipsaw as Hormuz Disruption Rattles Energy Markets

A Trans-Atlantic Divide Opens Further

The results expose a persistent gap between European majors and their American counterparts. Exxon Mobil and Chevron have not built comparably large trading organizations. Carulli suggested that could change, particularly as U.S. producers gain greater influence over global supply relative to OPEC. Europe’s three supermajors have long trailed U.S. peers on valuation multiples. A sustained trading edge could begin to narrow that discount.

Also Read: Shell and BP Face Valuation Gap With U.S. Oil Giants

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