Extended global energy disruption poses systemic risk - TotalEnergies CEO warns

A disruption to global energy supplies resulting from the U.S.-Israeli war on Iran that lasts beyond three to four months would present a systemic risk to the global economy, according to TotalEnergies CEO Patrick Pouyanne.

Speaking at the CERAWeek energy conference in Houston on Monday, Pouyanne highlighted the severity of the crisis.

Pouyanne explained that the disruption to global fuel supplies is currently more severe than the disruption to crude oil supplies.

This situation has been exacerbated by a Chinese export ban on critical products such as diesel, gasoline, and jet fuel, a measure implemented by China to ensure sufficient domestic supplies during the ongoing crisis. Consequently, this ban has rendered the fuel supply situation in Southeast Asia unsustainable.

The geopolitical conflict has severely impacted major energy facilities, with the U.S.-Israeli war and Tehran's attacks on Gulf neighbors bringing shipping through the critical Strait of Hormuz to a near halt.

The Strait is highly significant as it is responsible for handling approximately 20% of global oil and liquefied natural gas flows.

Amidst these challenges, Pouyanne highlighted TotalEnergies' strategic investments in electricity and renewable energy.

The company is betting on the rising demand driven by artificial intelligence, alongside continued investments in gas-fired power plants.

As part of this strategy, TotalEnergies signed two long-term agreements in February to supply solar power to Google’s data centers in Texas and agreed to a 15-year power purchase deal to supply Google with 1.5 terawatt hours of renewable electricity from its Montpelier solar farm in Ohio.