London (AFP) – British energy giant BP on Tuesday reported a sharp increase in profits in the first quarter as crude oil prices soared amid the Middle East war. Oil prices have risen since the start of the US-Iran conflict on February 28, often swinging violently in response to the war’s ever-changing headlines.
BP’s profit after tax jumped to $3.8 billion for the January-March period from $687 million in the same quarter a year earlier, London-listed BP said in an earnings statement. The closely followed underlying profit figure more than doubled to $3.2 billion from $1.4 billion the previous year, a figure that “reflects exceptional oil trading contribution,” the statement said.
“Overall, our business continues to run well. This was another quarter of strong operational and financial delivery, and we made further progress towards our 2027 targets,” said CEO Meg O’Neill, who was appointed at the end of last year to replace Murray Auchincloss. The group had announced in mid-April that it expected to benefit from rising oil prices, noting that the price of Brent North Sea crude, the international benchmark, averaged $81.13 a barrel in the first quarter, up from $63.73 in the fourth quarter of last year.
Oil prices have been volatile due to the war, coming close to $120 a barrel in March, which BP traders were able to profit from. “Traders do best in periods of volatility as sharp swings in the price create gaps between buyers and sellers …and greater hedging demand from industries like the airline sector,” said AJ Bell head of markets, Dan Coatsworth. “The highest quarterly profit in the best part of three years is not a bad way for new BP CEO Meg O’Neill to begin her tenure.” BP shares were up 3 percent Tuesday by midday on the London Stock Exchange.
The company said in mid-April that each one dollar variation in the price of a barrel has a $340 million impact on its annual operating profit before tax. BP “has been working relentlessly to keep our assets producing safely, reliably and efficiently,” while working “in an environment of conflict and complexity,” O’Neill said. The American CEO took up her post in early April with a mission of implementing a recovery plan for the struggling group, whose profit after tax in 2025 plunged 86 percent year-on-year to $55 million.
– ‘Simpler, stronger’ –
BP’s performance has generally fallen behind that of its rivals in recent years, and last year the company mounted a boardroom shakeup after slashing clean energy investment and pivoting back to its more profitable oil and gas business. O’Neill plans to reorganise the company, clearly separating its upstream and downstream activities. Her aim is to make BP “a simpler, stronger, more valuable company,” she said Tuesday.
“Now, we have to capitalise on the opportunity that exists across our portfolio, simplifying how we work, unlocking growth and driving improved returns,” she added. The new CEO faced a stinging rebuke from shareholders last week at the annual general meeting where they largely rejected two board proposals as a step backwards on transparency, particularly concerning climate strategy. One proposal aimed to revoke two resolutions adopted at previous general meetings, which required BP to publish certain climate-related information. The other was intended to authorise holding shareholder meetings exclusively online.
BP chairman Albert Manifold, who took office on October 1, faced a personal rebuke, with around 18 percent of shareholders voting against his election.
© 2024 AFP
