Top European Oil Stocks to Watch According to Bernstein

Investing.com -- European oil majors are positioning themselves for what Bernstein analysts describe as a "long plateau" rather than a sharp decline in global oil demand.

According to Bernstein’s latest research, oil demand is projected to maintain levels above 100 million barrels per day through 2036, with 2040 estimates showing approximately 99 million barrels daily—similar to 2022 consumption. This outlook suggests a gradual transition rather than the abrupt "peak and plunge" scenario many have anticipated.

With non-OPEC supply potentially peaking earlier than demand and insufficient upstream capital expenditure to offset natural decline rates, the market appears headed for a structurally tighter environment where even small shifts could trigger significant price movements. Based on Bernstein’s analysis, here are the top European oil companies best positioned to navigate this evolving landscape:

1. TotalEnergies: The French energy giant tops Bernstein’s rankings among European oil companies. TotalEnergies has strategically balanced its traditional oil operations with significant investments in renewable energy and natural gas.

The company’s diversified portfolio and strong presence in liquefied natural gas (LNG) markets position it well for the projected long plateau in oil demand while preparing for the energy transition.

In recent news, TotalEnergies has been actively managing its portfolio by selling its Argentina shale assets to YPF while acquiring a 25% stake in several of Chevron’s U.S. offshore exploration blocks.

2. Equinor: Norway’s state-backed energy company secures the second position in Bernstein’s assessment. Equinor benefits from low-cost, low-carbon intensity production assets in the North Sea.

The company has been redirecting capital toward renewable energy projects while maintaining efficient oil and gas operations, creating a balanced approach to the energy transition while capitalizing on structurally supported oil prices.

Equinor and its partners announced an investment of over $2 billion to develop the North Sea Fram Sor project, which is intended to increase oil and gas supplies to Europe.

3. Galp: The Portuguese energy company ranks third on Bernstein’s list. Galp’s advantageous position stems from its high-quality upstream portfolio, particularly its stakes in Brazilian pre-salt fields, which offer lower production costs and carbon intensity.

The company has also been expanding its renewable energy footprint, preparing for the gradual shift in energy markets while benefiting from sustained oil demand.

Galp Energia recently reported strong financial results for its second quarter, with Group EBITDA increasing by 25% to €840 million.

4. BP: The British energy major rounds out Bernstein’s top European oil stocks. BP has undertaken significant portfolio restructuring, divesting higher-cost assets while maintaining focus on its most profitable oil and gas operations. The company’s strategy includes substantial investments in low-carbon businesses while optimizing its traditional operations to benefit from the projected balanced oil market conditions.

BP signaled a strong trading performance for its second quarter and announced its largest oil and gas discovery in 25 years in Brazil. The company is also continuing its strategic refocus by selling its U.S. onshore wind business to LS Power.

As OPEC’s influence on global oil supply grows and markets remain finely balanced, these European energy companies appear well-positioned to navigate the complex dynamics of a market that, according to Bernstein, will see demand plateau rather than collapse, even as the energy transition progresses.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.