Repsol Delays US Listing Amid Energy Market Volatility

Spanish oil major Repsol has decided to postpone its planned US listing due to severe disruption in global energy markets caused by the ongoing Iran conflict and gridlock in the Strait of Hormuz. The company has been preparing for a US-based corporate listing for the past four years, since selling 25% of its upstream business to US private equity investor EIG for $4.8 billion. While Repsol was gearing up to execute a transaction this year, the widespread market upheaval has dampened this timeline.

Strategic Decision and Options

Repsol CEO Josu Jon Imaz stated that the company will not rush into a liquidity event in the short term. The firm had been considering three options for the transaction: an initial public offering (IPO) of the business, a reverse takeover with a US-listed company, or bringing in a private investor. Imaz emphasized that these temporary circumstances are not dramatically changing the valuation of the business, as investors take a long-term view, and the company is comfortable not proceeding with the listing this year.

Upstream Portfolio Recalibration

In preparation for the transaction, Repsol has been recalibrating its upstream portfolio, improving its quality compared to three to six months ago. Key developments include the Lapa South-West project in Brazil starting production in March, and the merger of Repsol's UK business with TotalEnergies' upstream unit, which increased volume contribution from the UK North Sea. In the US, first oil at the Pikka project in Alaska is expected shortly, and the company has secured additional exploration acreage in the area to support future activity.

Refining Performance and Outlook

Repsol benefited from a tangible growth in refining margins during the quarter, as middle distillates and product availability were severely curtailed by shipping gridlock through the Strait of Hormuz. The company reported a refining margin premium of $5.7 per barrel. Imaz expressed a bullish view on refining-related performance for 2026, forecasting a refining indicator "probably above $9 per barrel" and a refining premium "probably above $5 per barrel for the whole year."

Venezuela Operations and Opportunities

Repsol's recent agreements to restart receiving oil cargoes from Venezuela will support its refining performance, with one cargo due to reach its refinery in Spain next week. Venezuela produces mostly heavy and sour crude grades that require specialized refinery setups, which can be handled mainly by Repsol's refineries in Spain and US Gulf refineries. Imaz noted that good access to heavy oil is beneficial for the company's refining system. On the evolving Venezuela opportunity, Repsol has achieved important steps to normalize operations and plan for an increase in output. The company recently signed an agreement with state-owned PDVSA to resume control of its Petroquiriquire oil asset (with a 40% stake in a joint venture) and to receive payment for its gas production serving the domestic market. Imaz stated that priorities for the country are monetizing current production and increasing volumes, as Venezuela is starting to recover. Repsol previously indicated it targets a three-fold increase in production within three years and a 50% increase in the next 12 months.

First-Quarter Earnings

Repsol posted a sharp increase in first-quarter earnings, driven by booming refining, trading, and gas operations during a period of severe market volatility.