Big Oil sails on amid storm threat

Top oil and gas companies are watching the worsening global economic outlook with trepidation, but they currently appear to be doing little to correct course in the face of the approaching storm.

- Ron Bousso

The level of uncertainty in global energy markets has shot up in recent months due to US President Donald Trump's tariff flip-flops, stop-start negotiations over the Ukraine conflict, tightening sanctions on Iran, and growing signs of disagreement among Opec and other major producers.

Crude prices have fallen by around US$20 (656 baht) since the start of the year to $62 a barrel, significantly below the price energy majors need to maintain their spending plans while also delivering elevated shareholder returns without borrowing.

Probably of more concern to companies is a slump in long-term prices, shifting into a structure known as contango, where contracts starting in January 2026 trade below those further out, indicating weaker demand.

Executives are well aware of the worsening environment.

"We have indeed entered into a period of heightened macroeconomic and geopolitical uncertainty," TotalEnergies CEO Patrick Pouyanne said on a call with analysts last Wednesday.

This "fluid landscape" is muddying the outlook for oil demand and operating costs while increasing volatility, he said, adding, however, that there is no need for now to panic or overreact.