TotalEnergies SE Chief Executive Patrick Pouyanne highlighted a stark divergence in global oil markets, noting bearish conditions for crude while refined products trade at historically high premiums. Speaking at the ONS conference in Stavanger, Norway, Pouyanne described the current setup as "very strange," with benchmark crude near $90 per barrel in London—well below levels observed at the start of Russia’s invasion of Ukraine.
The CEO attributed the crude weakness to structural oversupply, while product markets—particularly diesel—have surged to near 15-year highs relative to crude. This imbalance has disproportionately affected European consumers, Pouyanne said, as refiners struggle to pass through higher input costs amid constrained product flows.
In the U.S., gasoline prices are expected to remain above $4 per gallon, according to Pouyanne, who cited policy constraints under President Trump as a limiting factor on further declines. The statement underscores the divergent policy and supply dynamics shaping regional fuel markets.
Geopolitical risks continue to complicate shipping logistics. Pouyanne noted that crude shipments through the Strait of Hormuz remain uninterrupted, but rising freight costs have halted refined product movements entirely. A very large crude carrier transporting 2 million barrels now faces shipping expenses of roughly $20 million, while smaller product tankers have been priced out of the route entirely.
Ukrainian drone strikes targeting Russian refineries have further tightened global product markets, reducing Russian fuel supply by an estimated 3 million to 3.5 million barrels per day. The disruption has exacerbated the structural tightness in diesel and gasoline markets, particularly in Europe where refiners face higher procurement costs and logistical bottlenecks.
