A major oil and gas company bought up oil and made over $1 billion in war profits

One of the world's largest oil and gas companies, France's TotalEnergies, dominated the physical Middle East oil market in March. The company took advantage of supply disruptions due to military action to make super profits, a source told the Financial Times.

TotalEnergies' trading unit has made more than $1 billion by buying up all available crude from the UAE and Oman in March with shipments due in May, a source told the FT. It bought 70 shipments of Middle East benchmark Dubai - more than double the amount it bought in February. By comparison, 347 shipments of this crude have been sold in this market for the whole of 2025, Bloomberg notes.

TotalEnergies was able to make such significant profits by using so-called "paper" oil market instruments - futures, options and swaps - to hedge physical oil positions and bets on rising prices, the FT explains.

"This is probably the largest single player position in the history of the oil market in terms of financial returns," Oxford energy systems lecturer Adi Imsirovic told the FT.

"There has been an unusually high level of activity this month. The [trading] volumes were higher than usual, and the market was actually under the control of one player on the buyers' side," said Fabian Ng, head of oil pricing in Asia at Argus Media.

"In line with company policy, we do not comment on trading," a TotalEnergies spokesperson told the FT.

The company's shares were up 2.6% on March 30, having gained nearly 45% since the beginning of the year.

Even before the US and Israel launched an operation against Iran on February 28, TotalEnergies was among the leading bidders for Dubai oil contracts, the FT notes. When Tehran restricted traffic through the Strait of Hormuz, three of the five grades used to calculate the Dubai price were blocked. As a result, Platts, which manages the Dubai contract, excluded oil passing through the Strait of Hormuz from the valuation.

Demand for the two remaining grades - Murban from Abu Dhabi and Omani crude - surged, pushing prices up. TotalEnergies doubled its purchases, the FT writes.

The reduction in the number of contracts increased the volatility of the benchmark and allowed one participant to dominate the market, the newspaper explained. "Suddenly the trading volume has dropped dramatically, and that makes any contract much more vulnerable to one player taking a long position," Imsirovic noted, "I guess Total was probably just very lucky to have a long position in 'paper' oil when the war started and the Strait of Hormuz was closed."

The price of Dubai crude has risen from around $70 a barrel on the eve of the war to an all-time high of around $170 last week - as purchases by TotalEnergies continue, the publication explains. By comparison, global benchmark Brent was only worth about $120 a barrel at its peak.

Several traders confirmed to Bloomberg last week that the scale of Total's purchases is unprecedented in their practice and has added to the pressure on prices.

The large bets in the Dubai market could be seen as an expectation that the war with Iran will limit supplies for several more months, Bloomberg said, as the shipments traded now won't be loaded until May.

Some participants trading against Total note that they are not necessarily betting on the duration of the war. In their words, prices have risen so much because of these aggressive purchases that it has become attractive to play for a short-term decline.

This article was AI-translated and verified by a human editor