European Integrated Energy: Strong cash flow amid volatility – 2Q preview

Research evidence excerpt

European Integrated Energy: Strong cash flow amid volatility – 2Q preview

Equity Research

29 June 2026

European Integrated Energy

Strong cash flow amid volatility –

2Q preview

As we approach end of the quarter, oil prices have fallen back European Integrated Energy

to pre-war levels as geopolitical risks and Hormuz supply POSITIVE Unchanged

concerns ease; however, the higher crude and robust refining European Integrated Energy

Lydia Rainforth, CFAmargins since early March should still drive sector earnings

and cash flow in the second quarter. +44lydia.rainforth@barclays.com(0)20 3134 6669

Barclays, UK

Oil, gas and refining margins rise q/q: As we near the end of the quarter, oil prices have Naisheng Cui, CFA

returned to pre-war levels, down 40% from their April peak. However, 2Q oil prices still averaged +44 (0)20 7773 0486

$97.5/bl, close to $20/bl higher than in 1Q. European natural gas prices increased by c.15% q/q, naisheng.cui@barclays.com

while Henry Hub prices declined by c.30% q/q. Refining margins remained strong both y/y and Barclays, UK

q/q, pointing to robust sector earnings momentum during the quarter. Ramachandra Kamath

+91 (0)22 61752308

Strongest quarterly cashflow in three years: We expect sector corporate RoCE of 16% in 2Q26, ramchandra.kamath@barclays.com

up 2.5pp, driven by both upstream and downstream performance more than offsetting Barclays, UK

production impact in the Middle East. We forecast sector earnings to increase by c.21% q/q and Thea Lacroix

FCF by c.20% q/q, supported by higher commodity prices, stronger benchmark refining margins +44 (0)20 3555 3088

and a potentially higher trading contribution. We expect sector underlying FCF to exceed $30bn, thea.lacroix@barclays.com

the highest level since 1Q23.