European oil majors, including TotalEnergies, Shell, and BP, reported better-than-expected first-quarter profits, largely driven by strong performance from their commodity trading desks. These specialized units generate revenue by buying, selling, and transporting physical oil and gas, proving highly profitable during periods of market volatility and geopolitical tension. Analysts noted that this trading capability provides a distinct competitive edge for European firms compared to some US rivals. However, industry experts caution that while trading was crucial in Q1, the companies' core business priority remains ensuring stable supply through refining and marketing operations, suggesting trading gains are cyclical rather than indicative of a permanent shift in business structure.
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Major European oil companies reported stronger-than-expected first-quarter profits, largely attributed to robust performance from their specialized commodity trading desks. These units, which buy, sell, and transport physical oil and gas, proved crucial during a period of extreme market volatility.
European Majors Lead Trading Gains
TotalEnergies, Shell, and BP all highlighted significant trading contributions when reporting their Q1 earnings. The boost came amid heightened global energy market uncertainty, particularly following geopolitical tensions near the Strait of Hormuz.
TotalEnergies: Reported a quarterly net income of $5.4 billion, marking a 29% year-over-year increase, with CEO Patrick Pouyanné citing a "very strong performance" in crude oil and petroleum products trading during March.
Shell: Posted first-quarter adjusted earnings of $6.92 billion (up from $5.58 billion the previous year), with CFO Sinead Gorman noting "significantly higher trading and optimization contributions."
BP: Reported a net profit of $3.2 billion, more than doubling its profit from the same period in 2025.
Maurizio Carulli, an equity research analyst, noted that TotalEnergies, Shell, and BP excelled in establishing large trading units for oil, gas, and LNG, setting them apart from peers.
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The Role and Nature of Oil Trading
Oil trading desks are specialized divisions designed to generate revenue beyond core upstream production by managing price risks and facilitating physical commodity movement. Analysts emphasize that this activity is fundamentally tied to physical assets.
Physical Basis: Experts clarify that the trading is supported by hydrocarbons the majors either produce or have physical access to, which they can move globally via owned or contracted infrastructure.
Market Advantage: Allen Good of Morningstar pointed out that European firms benefit disproportionately during high volatility (such as geopolitical crises), allowing them to capitalize on trading opportunities alongside high commodity prices.
Market View: Trading desks were estimated to have generated between $3.3 billion and $4.75 billion in extra earnings in Q1, according to estimates cited by The Financial Times.
Analyst Caution: Volatility vs. Core Business
Despite the strong trading results, several industry analysts cautioned against overemphasizing this factor as a reflection of the companies' long-term business model.
Sustained Operations: Alastair Syme of Citi advised that the primary focus of these integrated companies remains supplying customers, meaning refining and marketing operations are paramount.
Market Context: Analysts suggest that while trading thrives during price swings, its contribution can be inconsistent. They caution that in calmer markets, the revenue from core operations may take precedence over trading gains.
Future Outlook: The strong trading performance highlights a competitive advantage for European majors over US peers, but experts suggest that the market must view this contribution within the context of overall operational stability.
