Strong 2Q + Geopolitics + Diesel Strength

Research evidence excerpt

Strong 2Q + Geopolitics + Diesel Strength

Idea

July 9, 2026 04:46 PM GMT

Morgan Stanley & Co. International plc+MEnergy | Europe Martijn Rats, CFA

Equity Analyst and Commodities Strategist

Strong 2Q + Geopolitics + Martijn.Rats@morganstanley.comGuilherme Levy +44 20 7425-6618

Equity Analyst

Guilherme.Levy@morganstanley.com +44 20 7425-6616

Diesel Strength Alice Bergier Winograd

Alice.Winograd@morganstanley.com +44 20 7425-0174

2Q results are set to be the strongest in many years. Together

Energy

with rising tensions in the Middle East again, and possibly under- Europe

appreciated diesel strength, we suspect the sector may regain Industry View In-Line

some tactical momentum. TotalEnergies remains Top Pick What’s Changed

among the majors, followed by BP. SaudiPrice TargetAramco (2222.SE) FromSAR 28.40 ToSAR 27.40

BP plc (BP.L) From To

Key Takeaways Price Target 619p 519p

We mark our models to recent oil price revisions, which results in ~15% EPS BP plc (BP.N) From To

downgrades for 2027. However, share prices have largely reflected this already Price Target US$49.40 US$41.70

The medium-term outlook remains bifurcated. If oil flows via the SoH broadly Eni SpA (ENI.MI) From To

Price Target €25.30 €22.00

normalise, 2027 could look like 2026 at the start of the year – i.e. a surplus

TotalEnergies SE (TTE.N) From To

Still, the geopolitics of the Middle East do not appear settled, creating ongoing Price Target US$103.30 US$88.00

downside risk to oil supply. On balance, our sector stance stays 'In-Line'

TotalEnergies SE (TTEF.PA) From To

Still, 2Q results are set to be the strongest in years, geopolitical risks appear to Price Target €89.10 €77.00

be rising for now, and diesel strength may be under-reflected in shares Shell PLC (SHEL.N) From To

Price Target US$93.00 US$81.60