TotalEnergies CEO Reveals the Real Cost of Shipping Crude Through the Strait of Hormuz

TotalEnergies chief executive Patrick Pouyanne told an energy conference in Stavanger, Norway, on 24 August 2026 that the French major is still shipping crude through the Strait of Hormuz at a profit, and that the cargoes are leaving the Gulf discreetly rather than through publicised fixtures. He described his group as probably the largest trader of Iraqi and Qatari crude at present. The comments were made at ONS 2026, where the ONS Foundation and the Munich Security Conference held a joint session on energy security and geopolitics.

The economics rest on how badly sellers need to place their barrels. According to Pouyanne, Gulf crude is being offered at $50 to $60 a barrel instead of the Brent-linked price, a discount of roughly $30 against a benchmark that traded above $90 on Monday. Moving a very large crude carrier through the strait and back costs around $20 million, which spread across a two million barrel cargo works out at about $10 a barrel of extra freight. Even with war risk premiums included, the delivered barrel still leaves a wide trading margin for anyone able to find a shipowner willing to make the crossing.

Refined products follow the opposite logic. Product tankers carry far smaller cargoes, so the same absolute cost of transit translates into a surcharge of about $50 a barrel, which Pouyanne called unsustainable. He said that as a result not a single products tanker is currently moving out of Hormuz. That split has produced what he described as a strange market, with crude looking bearish because discounted barrels keep finding buyers, and refined products looking strongly bullish because almost nothing is coming out of the Gulf.

The disruption dates back to the opening months of the year. Tanker traffic through the strait collapsed in late February and March 2026 during the United States and Israeli war with Iran, as mine and bombing threats pushed insurers and shipowners out of the waterway, and by late March the passage was effectively shut to vessels linked to the United States, Israel and their allies. Brent futures reached an intraday high of $119.47 on 9 March. TotalEnergies said the same month that production in Qatar, Iraq and offshore United Arab Emirates was halted or being shut down, affecting close to 15 percent of group output.

A ceasefire announced on 8 April allowed the first vessels to move again, but the reopening never became a recovery. Traffic through the summer stayed a fraction of normal. Lloyd's List Intelligence counted 73 transits between 10 and 16 August, down from 91 the previous week, against a pre-crisis baseline close to 73 crossings per day. IMF PortWatch recorded a single tracked crossing on 16 August, although vessels that stop broadcasting their position are not captured in that figure. Much of the crude now leaves the region through shuttle operations, with tankers loading west of Hormuz and transferring cargoes ship to ship in the Gulf of Oman. United States Central Command is separately maintaining a blockade of Iranian ports.

The products squeeze that Pouyanne described has become the sharpest part of the crisis. The diesel crack spread, which measures the margin between crude and diesel, hit a record near $102 a barrel in mid-August, close to three times its pre-war level. Gulf product exports are not the only missing supply. Ukrainian drone strikes have taken large volumes of Russian refining capacity offline, Moscow has restricted diesel exports, and China has been slow to release product export quotas, leaving Europe dependent on record United States shipments and drawing down already tight inventories. Analysts at Citi have pointed out that observed global diesel stocks are below their five year minimum.

Port operations around the strait tell the same story. DP World is spending roughly $100 million a month to keep Jebel Ali ready to reopen while container throughput sits near 10 percent of normal levels, with cargo rerouted through Fujairah, Khor Fakkan, Omani ports and the Jeddah land bridge.

TotalEnergies is hedging against a long crisis rather than betting on a quick reopening. Pouyanne confirmed the group will take a stake in the planned pipeline carrying Iraqi crude through Syria to the Mediterranean, the revived Kirkuk to Baniyas route that Baghdad and Damascus agreed to rebuild in July, and will invest in doubling the Fujairah export line in Abu Dhabi. The existing Habshan to Fujairah pipeline can carry up to 1.8 million barrels per day to the Gulf of Oman coast outside the strait, and the United Arab Emirates hopes to double that capacity next year. Cost estimates for the Iraqi route range from about $4.5 billion to $15 billion, with a construction period of at least three to four years. TotalEnergies has not disclosed how much it will commit or what stakes it will take.

Prices have eased slightly since the conference. Brent was trading around $90 a barrel on 25 August, its second consecutive session lower, after a new package of United States sanctions on Iran landed softer than the market had feared and mediation efforts involving Oman, Qatar and Pakistan raised hopes of a negotiated arrangement on transit. Nothing in those signals has yet restored product flows.

For buyers, the practical reading is that crude is available at a discount for those willing to carry the risk, while diesel, jet fuel and gasoline remain physically scarce and expensive. Freight, agriculture, aviation and power generation in import dependent markets across Southeast Asia, Sub-Saharan Africa and Latin America carry the heaviest exposure. Unless transit conditions improve or refining capacity outside the Gulf can be pushed higher, the products shortage is likely to persist into the northern hemisphere winter.