In the first quarter of 2026, major oil companies such as TotalEnergies, Shell, and BP reported stronger-than-expected profits, largely attributed to their trading desks, which have performed well during periods of market volatility.
The volatility in oil prices, particularly in March due to disruptions in the Strait of Hormuz amid the Iran war, provided these companies with significant trading opportunities.
TotalEnergies reported a quarterly net income of $5.4 billion, a 29% increase from the previous year, while Shell's adjusted earnings rose to $6.92 billion from $5.58 billion, and BP's net profit more than doubled to $3.2 billion.
Analysts noted that these trading units, which manage price risks and generate revenue beyond traditional production, have become a competitive advantage for European oil majors compared to their U.S. counterparts like Exxon Mobil and Chevron. The trading desks are estimated to have contributed between $3.3 billion and $4.75 billion in additional earnings for these companies in the first quarter.
However, while trading can enhance profits during volatile times, it also introduces risks and challenges in cash management, as highlighted by analysts. Some cautioned that the recent volatility may not reflect a sustainable shift in business models, emphasizing that these companies must balance trading profits with their core operations to meet customer demand.
Overall, while trading has proven beneficial in the short term, it presents a complex dynamic for the oil industry moving forward