Equinor doubles buyback to $3 billion as Iran war boosts cash flow

Equinor will return $3 billion to shareholders this year, doubling its buyback plan as the Iran conflict lifts oil and gas earnings.

Norway's Equinor ASA doubled its 2026 share buyback program to $3 billion and laid out plans to boost oil and gas output by 150,000 barrels of oil equivalent per day by 2030, capitalizing on higher energy prices driven by the war in the Middle East.

"The demand continues to grow and Equinor is uniquely positioned to provide reliable energy," said Anders Opedal, president and chief executive officer of Equinor ASA. "We will deliver more energy, growing cash flow and superior returns toward 2030."

The majority state-owned company now plans to spend $3 billion on share repurchases this year, up from the $1.5 billion it projected in February before the U.S.-Israeli attack on Iran sent crude prices higher. Equinor also aims to grow its quarterly cash dividend by more than 5 percent per share annually, and from 2027 will target annual buybacks of between $2 billion and $4 billion, contingent on oil prices of $60 to $80 per barrel and European gas prices of $7 to $11 per million British thermal units.

The strategy update signals that Europe's largest oil and gas producer by market value is doubling down on fossil fuel investment even as the energy transition accelerates, betting that oil and gas demand will remain higher for longer because of electrification and the artificial intelligence build-out driving power demand.

Equinor expects to increase total production to 2.3 million boed by 2030, with around 60 percent of capital expenditure allocated to further developing the Norwegian continental shelf. The company forecasts NCS production of 1.35 million boed in 2030 and 1.3 million boed in 2035, representing an increase of 100,000 boed from prior guidance.

International oil and gas production is anticipated to rise by about 30 percent to approximately 950,000 boed, generating cash flow from operations of roughly $9 billion by 2030, the company said. Equinor expects the international portfolio to deliver around $20 billion in free cash flow after capex and lease payments from 2026 to 2030.

Production Targets and Capital Allocation

Equinor plans to allocate about 30 percent of capex to international exploration and production, with positions in the U.S., Brazil, Angola, the UK and Canada. The company said it aims to develop six to eight new tie-back projects annually toward 2035, with break-even prices below $35 per barrel and payback times of less than 2.5 years.

The company is also building a competitive power business, targeting a fourfold increase in production to more than 20 terawatt-hours by 2030, with about 10 percent of capex allocated to that segment. Equinor expects cash flow from operations to fund organic investments in the power business from 2027 onward, with nominal equity returns above 10 percent.

Shareholder Returns Framework

Equinor's enhanced capital distribution plan comes as the company reported a total shareholder return of almost 1,800 percent over 25 years as a listed company. The increased buyback for 2026 will be distributed equally across the third and fourth tranches, subject to separate board approvals.

The company's decision to boost returns contrasts with Shell Plc, which recently halted $3 billion in buybacks as its acquisition of ARC advances, highlighting divergent capital allocation strategies among European energy majors.

This article is for informational purposes only and does not constitute investment advice.