28 April 2026 , 22:30
561
0
Volatile energy prices have provided a windfall for BP, giving an early boost to efforts by its new boss to restore confidence in the oil major.
Underlying profits for the first quarter more than doubled to $3.2 billion, surpassing the forecast of $2.7 billion from City analysts.
Performance was enhanced by an “exceptional” performance from its oil traders, capitalizing on volatile crude prices due to the Middle East conflict and Iran’s closure of the Strait of Hormuz.
Oil and gas prices have risen sharply since the strait, which carries about a fifth of the world’s energy supplies, was effectively closed. Brent crude, the international oil benchmark, averaged $81.13 a barrel during the first three months of the year, up from $63.73 a barrel in the fourth quarter of last year.
However, price lags built into some of BP’s contracts meant that it did not translate to the average price at which it sold oil and gas in the quarter.
The group also warned that underlying oil and gas production is expected to remain flat this year, reflecting disruption caused by the conflict in the Middle East.
The results are the first to be delivered by Meg O’Neill, who took over as chief executive at the start of April.
O’Neill, 55, said: “We are heading in the right direction, strengthening the balance sheet and continuing to accelerate delivery. Now, we have to capitalize on the opportunity that exists across our portfolio, simplifying how we work, unlocking growth and driving improved returns.”
She is expected to intensify the shift back towards oil and gas, moving away from the transition towards greener forms of energy initiated by Bernard Looney, who stepped down as chief executive in 2023.
Prior to the arrival of the American executive, share buybacks were suspended, allowing the group to “fully allocate” excess cash to pay down debt and invest in its pipeline of oil and gas projects. A quarterly dividend of 8.32 cents a share was declared for the first quarter.
Net debt fell to $25.3 billion, down from almost $27 billion at the same point a year earlier, which it hopes to reduce to between $14 billion and $18 billion by the end of 2027.
BP is being urged by shareholders, including Elliott Management, to reduce debt and simplify its operations. The activist New York hedge fund’s stake is more than 5 percent.
Higher oil and gas prices could help BP reduce its leverage more quickly if it can allocate excess cash to paying down debt, analysts have said.
A target to save between $6.5 billion and $7.5 billion by the end of next year was reiterated.
BP shares, which have risen 34 percent so far this year, gained 2.85 percent to 589p in early trading on Tuesday.
Editor-in-Chief