EU Oil & Gas: 2Q Tactical Views; Refining best placed in a quarter of many moving parts

Research evidence excerpt

EU Oil & Gas: 2Q Tactical Views; Refining best placed in a quarter of many moving parts

J P M O R G A N Europe Equity Research

03 July 2026

EU Oil & Gas

2Q Tactical Views; Refining best placed in a quarter of

many moving parts

Setting the bar for 2Q reporting. Middle East de-escalation is the sector’s key European Oil & Gas

ACnear-term variable. EU Oils price performance is correlating most closely to 1-2Y Matthew Lofting, CFA

forward oil prices (over spot volatility) and the 2027 FCF yield is now 11.0% at (44-20) 7134-6301

$75/bbl Brent. With that in mind, 2Q screens as strong absolute but backward matthew.lofting@jpmorgan.com

looking (eg: avg oil price near $105/bbl vs spot $70-75). In parallel, potential Tianyu Wu

variations in O&G price capture, trading and cash conversion point to a wider than (44-20) 3493-1281

usual range around consensus expectations. Against that backdrop, our tactical tianyu.wu@jpmorgan.com

J.P. Morgan Securities plc

views into reporting are: 1) Refining is re-strengthening on tight stocks, renewed

supply constraints and a parachute effect vs. moderating oil prices. Longevity Specialist Sales contact details:

remains to be seen but, near term, this favours downstream geared midcaps led by

Ian Mitchell - Specialist Sales -

OW Galp and N Repsol; 2) OW Galp for 2H. A catalyst-rich outlook creates scope European Energy

to re-rate with less oil price dependency than peers. Results should also bring (44-20) 7134-1356

welcome FY upgrades, though the Street appears to be in the right ballpark; 3) ian.e.mitchell@jpmorgan.com

Majors. The backdrop limits relative 2Q conviction across the large-caps. We

favour OW TotalEnergies for sound cash conversion, deleveraging and potential

for a further SBB increase to $2bn (’26 cash yield 9.4%). High end financial