Goldman Sachs: Big Oils: Assessing Upside from Gas Prices and Volatility; BP and Vår Energi Top Picks
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Goldman Sachs has upgraded its 2026 and 2027 Brent and TTF natural gas price forecasts following damage to Qatar's Ras Laffan LNG facility, which disrupted approximately 17% of export capacity. The revised 2026 Brent forecast stands at $92.7 per barrel, while TTF estimates jumped to $17.7 per mcf, exceeding consensus by significant margins. The report designates BP and Vår Energi as top picks. BP is favored for its lack of direct Qatar exposure and superior LNG trading capabilities, positioning it well to capitalize on price volatility. Vår Energi boasts the highest share of European Union gas production among exploration and production peers. Historical analysis of the 2022 energy crisis demonstrates that integrated gas earnings for BP, TotalEnergies, and Shell exceeded prior year operating profits by $8.5 billion, $7.0 billion, and $5.9 billion, respectively. Goldman Sachs now projects 2026 EPS for covered European E&P companies to average 65% above consensus, with Harbour Energy and Vår Energi showing the largest variances. European major oil companies are expected to sustain shareholder returns around 8% over the next two years, with total cash yields for BP, TotalEnergies, and Shell ranging between 8% and 10%.