TotalEnergies continues to transport crude oil through the Strait of Hormuz at a profit despite escalating geopolitical risks in the region, the company’s chief executive said on Monday.
Speaking at an energy conference in Norway, Patrick Pouyanne said TotalEnergies has become one of the largest traders of oil originating from Iraq and Qatar, moving cargoes through the narrow Gulf waterway even as attacks and mine threats have largely disrupted shipping. “Today, we are probably the biggest trader of oil from Iraq or Qatar,” Pouyanne said. “And I can tell you that crude oil is moving very quietly and not publicly through the Strait of Hormuz.”
The profitability stems from discounted crude prices offered by producers seeking market access, Pouyanne explained. Producers are selling oil at $50 to $60 per barrel—well below the Brent benchmark, which was trading above $90 per barrel on Monday—while shipping costs through the strait remain manageable. A round-trip voyage for a very large crude carrier costs roughly $20 million, translating to an additional $10 per barrel when carrying two million barrels of oil.
Refined oil products, however, face prohibitive transport costs. The smaller vessels used for refined products incur a $50 per barrel surcharge, making such shipments commercially unviable. As a result, no tankers carrying refined products are currently transiting the strait.
To mitigate risks and diversify routes, TotalEnergies plans to expand infrastructure. Pouyanne announced investments in a pipeline linking Baghdad to Syria and a doubling of capacity for the Fujairah pipeline in Abu Dhabi.
The company’s strategy reflects a broader industry effort to navigate persistent regional instability while maintaining supply chain resilience.
