• TotalEnergies CEO reports that crude is transiting the Strait of Hormuz today with minimal disruption.
  • The calm comes amid ongoing US-Iran tensions and sanctions, with shipping and insurance costs still elevated.
  • TotalEnergies is cautiously resuming operations, waiting for stable transit before fully restarting production.

A Delicate Calm

TotalEnergies CEO Patrick Pouyanné said on Thursday that crude is moving through the Strait of Hormuz “very quietly” today, a sign that the critical waterway remains open despite heightened geopolitical risks. Speaking on the sidelines of an energy conference in Paris, Pouyanné noted that tanker traffic has resumed its usual rhythm, though he cautioned that the situation remains fragile.

“The strait is open, and we see vessels transiting without incident,” he said. “But we are a long way from normalcy. The risk premium is still there, and any escalation could change things in hours.”

The comments come after weeks of disruptions tied to US-Iran tensions and sanctions, which have forced some shippers to reroute or delay cargoes, spiking insurance rates and contributing to volatile oil prices. Brent crude, the global benchmark, traded at $82.34 a barrel early Thursday, down 1.2% from Wednesday’s close, as the quiet passage eased some immediate supply fears.

Cautious Restart

TotalEnergies, which operates upstream assets in the region, has been gradually resuming output but remains in a “wait-and-see” mode, Pouyanné said. “We need to see consistent, stable transit through Hormuz for at least a week before we’ll consider full restart of our production,” he added.

The company had suspended some operations earlier this month following a series of incidents, including the interception of a tanker by Iranian forces and the imposition of new US sanctions on shipping entities. Those events led to a spike in freight rates and war-risk insurance premiums, with some underwriters quoting rates as high as 0.5% of hull value, up from 0.1% in normal times.

“The calm we see today is welcome, but it’s a thin line,” said an analyst at a European energy consultancy, who asked not to be named. “Any spark—whether it’s a new interception or a cyberattack—could send prices through the roof again.”

Regulatory and Strategic Implications

The situation has renewed focus on the security of the Strait of Hormuz, through which about 20% of global oil consumption passes. The US has been pushing for international naval patrols to safeguard shipping, but Iran has warned against any military buildup.

For energy companies like TotalEnergies, the episode underscores the need for diversified sourcing and robust risk management. Pouyanné stressed that while the company remains committed to the region, it is also accelerating investments in other supply routes and renewable projects.

“We’ve seen this movie before,” he said. “The market adapts, but the volatility is not healthy for anyone.”

Looking Ahead

Traders are now watching for signals on US policy toward Iran, including potential waivers on sanctions for certain buyers. Meanwhile, TotalEnergies has set a deadline of Friday to decide on further production adjustments, according to Pouyanné.

“We’ll make a call based on data, not emotions,” he said.

For now, the quiet passage through Hormuz offers a temporary respite, but the underlying pressures remain. As one shipping broker put it: “It’s quiet today, but the fog hasn’t lifted.”

Correction: An earlier version of this article misstated the day of Pouyanné’s remarks. They were made on Thursday, not Wednesday.