Under the dark clouds of conflict, oil and gas trading businesses have greatly increased. Total S.A. (TTE.US) anticipates strong Q1 performance.

French energy giant Total (TTE.US) said in a trading update report on Thursday that its performance in the first quarter was strong, driven by a significant increase in energy prices and production outside of the Middle East region, offsetting the impact of the Iran war. The company also expects a substantial increase in oil and gas production and trading performance in the quarter. The first quarter financial report will be released later this month. The Iran war that erupted at the end of February disrupted the energy market, with shipping in the key chokepoint of the Strait of Hormuz almost completely stalled. Large European oil companies typically profit from market fluctuations through their extensive trading operations. Both Shell (SHEL.US) and BP p.l.c. Sponsored ADR (BP.US) reported strong trading performance in the first quarter. As the conflict escalated, Total's trading division launched one of the largest oil procurement operations in the Middle East last month, further driving up oil prices. Prior to the outbreak of the conflict, the company had already started purchasing large quantities of North Sea crude, leading to tight supply in the near term. New projects in Brazil and Libya mitigated the impact of production declines in the Middle East region, allowing the company to maintain oil and gas production at a level similar to the previous quarter. It was reported that due to the Iran war spreading across the entire Persian Gulf region, Total's oil and gas projects have been shut down. The war has led to the closure of the company's oil production facilities in Qatar, Iraq, and the nearshore of the UAE, accounting for about 15% of its total production. The company announced last week that a refinery it jointly built with the Saudi national oil company was closed due to an attack. Total CEO Patrick Pouyanne stated earlier this week that if the war continues, the impact on Total's energy production could be more severe. He said, "If this blockade lasts more than three months, we will start facing some quite serious supply issues." However, Pouyanne also mentioned that if negotiations were to restart and the Strait of Hormuz could quickly reopen, the situation could return to normal within three months. It is worth noting that the impressive performance of oil companies has also sparked controversy. According to reports, on the 4th, finance ministers from Germany, Italy, Spain, Portugal, and Austria wrote to the European Commission, calling for windfall taxes to be levied on energy companies due to the rise in oil prices caused by the Iran situation. They stated that the tax revenue could support temporary relief measures for consumers.