Overview

Piper Sandler has launched coverage of the Global Integrated Oils sector, assigning a broadly neutral outlook while projecting an average Brent crude price of approximately $80 per barrel through the next year. The firm expects adequate supply, assuming that war‑related disruptions will be resolved by 2027, and highlights that refining crack‑spread strength should remain robust, giving downstream operations a more favorable outlook than upstream activities.

Ratings and Recommendations

  • Chevron Corporation receives the sole Overweight rating and is identified as Piper Sandler’s top pick. The rating reflects the clearing of two major overhangs in the past 12 months: the resolution of the Hess dispute in Chevron’s favor and the completion of the Tengiz FGP expansion mega‑project. Analysts anticipate Chevron’s cash‑flow profile to stay attractive and expect its valuation discount to narrow to roughly 0.5 times ExxonMobil’s enterprise‑value‑to‑EBITDA multiple, compared with the current discount of about 1 times. Chevron also temporarily shut down production at its Petronius facility in the Gulf of Mexico due to an approaching storm, and BMO Capital reiterated an Outperform rating on the company.
  • BP p.l.c., Shell, TotalEnergies, and ExxonMobil are each assigned Neutral ratings, consistent with the firm’s overall sector view.
  • BP disclosed the sale of its stake in the Bay du Nord offshore oil project in Canada to partner Equinor. Mizuho also initiated coverage of BP with an Outperform rating.
  • Shell completed the $1.3 billion sale of Jiffy Lube International to an affiliate of Monomoy Capital Partners and is reportedly preparing to sell its offshore wind‑farm portfolio in a transaction that could exceed $1 billion.
  • TotalEnergies’ CEO stated that the company generates roughly $400 million in annual revenue from selling liquefied natural gas sourced from Russia’s Yamal LNG plant and mentioned a meeting with Syrian officials to discuss a potential exploration contract.
  • ExxonMobil received a Neutral rating, with Piper Sandler noting limited upside to its December 2027 price targets for most sector peers. Jefferies reiterated a Buy rating, citing strong downstream margins in ExxonMobil’s second‑quarter guidance, while Mizuho lowered its price target but maintained a Neutral stance. The company also changed its name to ExxonMobil Holdings Corp following its relocation to Texas.

Macro Outlook

Piper Sandler’s macro view favors downstream operations over upstream, observing that refined‑product supply has tightened severely—particularly for middle‑distillates—due to facility closures and damage that could take months to repair. The firm estimates its 2026 and 2027 EBITDA projections for the sector to be approximately 15 % and 16 % above Street consensus, respectively.