Iran war: BP profits more than double as oil trading booms on soaring crude prices

BP came under fire after it said profits had more than doubled in the first three months of the year, thanks to rising crude oil costs caused by the Iran war.

Chief executive Meg O’Neill praised the quarter for “sending the firm in the right direction” and “strengthening the balance sheet” – but critics described the energy giant’s earnings as “horrible” as “millions of people are suffering the consequences of war”.

The FTSE 100 firm said its preferred profit measure (core replacement cost profit) rose by more than 130% in the first quarter to a better-than-expected $3.2bn (£2.4bn). The figure was $1.38bn (£1.02bn) in the previous year and $1.54bn (£1.13bn) in the previous three months. Most analysts were expecting a profit of $2.67bn (£1.97bn) in the first quarter.

Campaigners accused the group of profiting at the expense of households, which have seen fuel prices soaring at the pumps and energy bills set to rise once again when the price cap is updated on July 1.

The price of oil has risen from the mid-$60s in February to over $100 now; It rose to $120 several times during the Iran war.

Patrick Galey, head of news research at campaign organization Global Witness, said: “It is appalling to see BP’s profits soaring while millions of people suffer the adverse effects of the US-Israeli war on Iran. Unfortunately, we have been here before; we saw major oil firms make huge profits from rising fuel costs when Russia invaded Ukraine four years ago.”

“As oil prices raise utility bills once again, it is clear that fossil fuel companies are not improving affordability or energy security, they are making life worse. They are destroying the climate, driving up the cost of living, and making billions of dollars in profits while innocent civilians die.”

“It is long overdue for us to make the oil companies pay for the damage they have caused. If they have broken it, they need to fix it. It is clear that they can afford it. BP is making a profit, we are all paying.”

Mike Childs, head of science, policy and research at Friends of the Earth, added: “Fossil fuel giants are paying up at a time when global instability is massively inflating fuel prices, just as we saw following Russia’s invasion of Ukraine in 2022.

“But it is ordinary people who are paying the price as rising energy prices threaten to plunge the UK deeper into a cost of living crisis.”

The End Fuel Poverty Coalition has called for a windfall tax on companies profiting from the Iran-related energy crisis.

Simon Francis, coordinator of the campaign group, said: “These astronomical profits are a stunning reminder that energy companies profit and households pay when conflict drives up oil and gas prices.”

BP’s new chief executive, Meg O’Neill, who took over on April 1, said the group was ensuring fuel supplies were met across the UK.

He said: “Teams at BP are doing their part to keep oil, gas and refined products flowing during an incredibly challenging time, focusing on maintaining safe, reliable and cost-effective operations.”

He added: “We work with customers and governments to deliver fuel where it is needed, helping to minimize disruption and its impact on people’s lives.”

Ms O’Neill takes over from Murray Auchincloss, who served in the role for just two years, following Bernard Looney’s three-year term. Before the recent steady changes, Bob Dudley spent a full decade in the job until 2020.

BP struggled to steer strategy and transition to clean energy, initially doubling down on its green plan before making a sudden reversal.

From a share price perspective, results showed BP rose 2.5 percent in early trading on Tuesday, adding to a more than 28 percent rise in the past three months alone, as investors watch the rising oil price and anticipate profits to come.

“In February, BP announced it was halting share buybacks as weak oil prices hurt profitability. How times change,” said Duncan Ferris, investment writer at Freetrade.

“The firm has been among the best-performing supermajors since the escalation of the conflict in Iran. High oil prices and the opportunities the company offers to its traders have breathed new life into the stock, which had been battered by low-carbon projects and investor unrest.”

Oil prices have soared since the start of the US-Israeli war against Iran on February 28 and are now up more than 60% so far this year.

Brent crude approached $120 a barrel at one stage and although it has pulled back, it still remains above the $100 level amid fears that peace talks have stalled and a global energy supply crisis is looming.

BP’s update showed its customer and product division, including its oil trading unit, reported profits of 2.5bn (£1.84bn); The figure was $1.4bn (£1.03bn) in the previous quarter, compared to just $103m (£76.2m) a year ago as traders took advantage of highly volatile oil prices.

Additional reporting by PA