ConocoPhillips Q1 2026 Guidance and Middle East Geopolitical Risks

Summary: what Q1 2026 guidance implies about Middle East geopolitical risk

ConocoPhillips’ Q1 2026 guidance was explicitly updated to account for the impact of “recent macro events and the uncertainty surrounding the Middle East conflict,” while management emphasized it is not a forecast about when the conflict resolves. ¹ As presented on the call, the effect of the Middle East situation on guidance is largely modeled through (1) specific production exclusions/royalty assumptions tied to Qatar and Surmont, (2) macro-driven market volatility assumptions affecting planning, and (3) a capital spending “range” to handle uncertainty in timing for LNG/Alaska projects (NFE/NFS). ¹²³

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1) Direct, quantified production impacts reflected in guidance

A. Qatar volumes excluded from 2Q guidance (and an annualized impact)

Management updated the annual production guidance midpoint to 2.31 million barrels of oil equivalent per day (boe/d). ¹ They stated this reflects an annual impact of 20 thousand boe/d due to Qatar being excluded from second-quarter production guidance. ¹ This is the most direct linkage between Middle East events and the guidance numbers. ¹

They further clarified that Qatar is a single producing asset (QG3) running at about 80 thousand boe/d last year (~3% of total company production and similar on CFO) and that the rest of the portfolio is “largely unaffected.” ⁴

B. Surmont royalty rate adjustment tied to higher oil prices

The same annual midpoint update (to 2.31 million boe/d) also reflects a 15 thousand boe/d annual impact from a Surmont royalty rate adjustment due to higher prices. ¹ While the excerpt does not say “the Middle East conflict caused the higher prices,” management does tie the guidance update to “recent macro events” and Middle East uncertainty, and the royalty change is explicitly driven by higher oil prices in the model. ¹

C. Second-quarter production guidance midpoint updated similarly

For Q2 2026, the guidance midpoint is 2.2 million boe/d, which management said reflects:

• full exclusion of Qatar production from Q2 guidance
• the Surmont royalty adjustment
• planned second-quarter maintenance ¹

So, the Middle East situation shows up in guidance first as a production modeling change (Qatar exclusion) and second as a prices/royalty modeling change (Surmont). ¹

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2) Broader macro uncertainty: guidance updated via ranges, not point forecasts

Management explained that the guidance changes are meant to provide a “clear and transparent framework to model and assess the underlying performance” amid uncertainty. ¹ They repeated that the guidance update is not a call on conflict resolution timing. ¹

A. Capital spending guidance increased slightly at midpoint

For capital spending, ConocoPhillips updated guidance to a range of $12.0 billion to $12.5 billion versus prior guidance of about $12.0 billion, which they described as a 2% increase at the midpoint. ¹ Management also stated the update is driven by the capital program reflecting uncertainty around macro and the Middle East conflict—especially around timing for NFE and NFS spending. ²

B. Equity value and “schedule uncertainty” is explicitly tied to NFE/NFS timing

Management said they were incorporating a guidance range to capture uncertainty around the macro environment and the Middle East conflict, specifically “as it pertains to timing for NFE and NFS spending.” ² Another question response characterized the capex variance largely as a range of uncertainty for NFE/NFS capital during the year. ³

They also indicated that some added Permian activity (rig and non-operated spend) is about maintaining operational efficiency and levelized steady-state execution, not making a major bet on macro prices. ⁵⁶

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3) Management’s stated “conflict effect” appears concentrated—especially in Qatar

In the Q&A, management provided a portfolio attribution that helps interpret guidance sensitivity:

• Qatar is ~80 kb oe/d (~3% of total production) and “the remainder…has been largely unaffected—really unaffected.” ⁴
• QatarEnergy conducted a controlled ramp down and largely a shutdown across most trains at Ras Laffan for security/process integrity, and because with the Strait closed there is limited capacity (if any) to lift cargoes. ⁴
• QatarEnergy expected the train strikes to impact the global market for upwards of 3 to 5 years (two trains struck; not Conoco’s). ⁴
• Conoco chose to remove Qatar from 2Q production guidance “for clarity” and said it would monitor both construction impacts and its own production there, noting it remains “conflict dependent.” ⁴

This suggests that Q1 2026 guidance sensitivity to Middle East conditions is not a broad-based operational disruption across the company; rather, it is concentrated in specific barrels and in project spend timing assumptions. ¹⁴²

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4) How the Middle East situation may (still) change the next guidance steps (directionally)

Even though Q1 2026 guidance updates were already made, management’s commentary implies potential future swings would likely come through:

A. Further Qatar-related operational assumptions (if the conflict worsens/continues)

Because Qatar volumes are directly excluded from Q2 guidance and management says that Qatar is “conflict dependent,” additional extensions or limitations would likely keep the model using similar or larger exclusions versus earlier assumptions. ¹⁴

B. Refining/product and demand-side macro knock-ons affecting prices and modeled cash flows

Management said ongoing events tightened crude oil and LNG markets and that the macro environment is “volatile and pretty impossible to predict.” ⁷ They also discussed how, in the oil market, the brunt of shortfall is being absorbed by refinery run cuts and demand curtailments, and that as tankers reach destinations, impacts could show up as accelerating inventory draws and some countries face shortages. ⁸ These dynamics can affect the price assumptions that feed royalty impacts and CFO forecasts. ¹⁸

C. Capital timing risk for NFE/NFS

The call explicitly incorporated a range for guidance uncertainty tied to timing for NFE and NFS spending. ²³ That means future guidance iterations would most likely adjust:

• the timing (not necessarily total) of spend for those projects, and
• possibly the execution schedule used in modeling.

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Bottom line

ConocoPhillips’ Q1 2026 guidance appears affected by the Middle East situation in three concrete ways evidenced in the excerpts:

1. Quantified production modeling changes: the annual midpoint and Q2 midpoint incorporate an explicit Qatar exclusion (20 kb oe/d annual impact; full Q2 exclusion) and a Surmont royalty adjustment tied to higher prices. ¹
2. Localized operational sensitivity: management emphasizes the impact is concentrated in Qatar (single asset, ~3% of production/CFO), with the rest of the portfolio largely unaffected. ⁴
3. Capital spending uncertainty captured as ranges: Conoco updated capex guidance modestly upward at the midpoint and included a range reflecting uncertainty tied to the Middle East conflict—specifically NFE/NFS spending timing—rather than making a single-point forecast. ¹²³

These are the most direct mechanisms by which the Middle East geopolitical situation is likely to influence subsequent guidance updates beyond Q1 2026—primarily through Qatar volume assumptions, price/royalty modeling, and project spend timing ranges. ¹⁴²