Oil giant Total has cut its buyback by 25%. What should investors expect?

France's TotalEnergies, one of the world's largest oil and gas companies, has decided to reduce the size of its share buyback program. In the context of low oil prices, other supermajors may follow Total's example, the Financial Times warned.

Total announced that in October-December 2025 it will allocate $1.5 billion for share buybacks - a quarter less than in previous quarters. Until recently, the company maintained the volume of quarterly buybacks at $2 billion in the expectation that the oil price will be above $70 per barrel, notes the FT.

The French oil giant also sharply lowered its forecasts for 2026 amid an "uncertain economic and geopolitical environment." Its benchmarks for next year in terms of buybacks range from $750 million to $1.5 billion per quarter at a benchmark Brent price of $60-70 per barrel and an exchange rate of $1.2 per euro.

Total shares fell 1% at the opening of trading in Paris, but then recovered some of the losses.

Other oil companies are already cutting staff and investment spending at a record pace since the pandemic, but are now likely to start cutting shareholder payouts - a key element of their investment appeal in recent years, the FT suggests. This is to reduce the debt load and provide financial flexibility in the face of falling oil prices, the publication explains. Weak oil prices are signaling the start of an era of lower returns for investors across the sector, the paper says.

As Morgan Stanley expects, all European oil companies - except BP, which has already done so - will cut back on share buybacks. "Most players will suspend buybacks completely if oil prices fall below $50 a barrel," consultancy Wood Mackenzie said on Sept. 24.

Total has announced a reduction in payments to shareholders ahead of the presentation of an updated strategy, scheduled for September 29. Market participants are interested in how much investment CEO Patrick Pouyanne will allocate to renewable energy, which now accounts for about a third of the company's annual budget, writes FT.

Wood Mackenzie predicts that European supermajors will cap spending on renewable energy and CO2 reduction at 30% of their budgets, while other international and public companies will spend 10-20%.

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