JPM EU Oils Back to school

J P M O R G A N Europe Equity Research 08 September 2026

EU Oils ‘Back to School’ Feedback Faltering inventories hard to ignore; Reiterate OW Eni, Shell, Iberian names over OMV in midcaps

Our ‘Back to School’ seminar hosted a range of Majors, OFS and E&Ps on European Oil & Gas drivers and catalysts through year end. The key message was that commodity Matthew Lofting, CFA AC inventories are fast approaching ‘code red’. In Europe, the region’s (increasingly) ( short position across multiple O&G products means this is driving prices higher across the board and points to a tough re-stocking journey. At forward strip based $75 Tianyu Wu Brent for 2027 we forecast an EU Oils FCF yield of 9.3%. The sensitivity around that ( is 150bps per $10 oil and 30bps per $1 refining. The seminar reinforced our conviction J.P. Morgan Securities plc in OWs on Eni and Shell. Elevated refining benefits all midcaps; discussions suggested the Iberians (OW Galp) are better placed than UW OMV. Specialist Sales contact details: Sector takeaways - inventories, volatility, refining, TSR...and windfall taxes. (1) Ian Mitchell - Specialist Sales - Inventories are hitting seasonal lows across multiple products and regions; we European Energy ( summarize the trajectory in Figures 1-2; (2) A by-product of that is increasing industry belief that price volatility will persist...even in the event of Hormuz reopening. This is supportive for EU majors trading businesses; (3) We highlighted a near term preference for refining in summer and QTD margins have hit record ~$40/bbl levels. This compares to a <$10 LT average, with each $1/bbl worth 30bps to the sector’s FCF yield; (4) Absolute cash returns will trend higher (buyback led), but elevated price/ CFFO baselines mean investors should expect corporates to target the lower end of %CFFO payout ranges; (5) Windfall tax risk. Timing and method (country vs. EU led) are unpredictable, but discussions and recent reports suggest next steps should be closely monitored, consistent with our expectations since March. We summarize full company-by-company majors feedback from page 4 onwards. Our key stock takeaways are; • OW Eni. Discussions underlined superior multi-year growth potential and positively trending execution. Venezuela adds to mid-term growth optionality through, importantly, a modulated development plan for the Junin asset. Nearer-term, GGP and downstream are well positioned (better than 1H) to capture 3Q EPS upside and we expect special div confirmation with results. Eni has performed well YTD but a 10.5% 2027 FCF yield remains competitive. • OW Shell. Outlined advantageous capacity to both capture market volatility upside and demonstrate resilience to downside scenarios. Buybacks are accelerating and a 3M underlying SBB of $4.2bn (Shell’s highest since 2022) includes a catch-up on a mid-year ARC-related regulatory pause and annualises at a 10%+ cash yield. The ARC acquisition has completed and next steps prepare Shell to pursue synergy objectives. • Midcaps - Iberians (OW Galp) better placed than UW OMV. Galp combines refining gearing with an active restructuring led catalyst pipeline. An FID of Venus (Namibia) is ‘technically ready’, downstream merger discussions are on-track and the Bacalhau (Brazil) oilfield is outperforming. Strong asset availability is enabling Repsol’s leading refining system to capture 3Q margins. Next steps on Spain/EU windfall taxes also need monitoring (high-end domestic EPS exposure). OMV is well placed on refining but more exposed to comparatively chequered chemicals trends. • BP (N). Underscored a renewed focus on balance sheet repair and operational consistency.

See page 29 for analyst certification and important disclosures, including non-US analyst disclosures.

Matthew Lofting, CFA AC Europe Equity Research ( September 2026 JPMORGAN

Key Charts Figure 1: Commodity inventories are under increasing pressure across Figure 2: ...while European gas stocks are also 30pp below the multi- the board; Oil and products continue to tighten… year average million bbl % 8,800

Global Crude + Products inventory 8,600 8,400 8,200 8,000 7,800 7,600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5Y…