British energy company BP reported a significant rise in its first-quarter profits, driven largely by volatile crude oil prices amid ongoing geopolitical tensions in the Middle East. The London-listed firm posted an underlying replacement cost profit of $3.2 billion for the January-March period, more than doubling from $1.4 billion during the same period last year and exceeding analyst expectations.
This surge was largely attributed to the company’s oil traders, whose operations benefited from sharp price fluctuations resulting from the conflict between the US and Iran, which began at the end of February. Brent crude, the international oil benchmark, averaged $81.13 per barrel in the quarter, up from $63.73 in the final three months of 2025. Prices reached nearly $120 per barrel in March as a result of disruptions, including Iran’s blockade of the Strait of Hormuz, a critical shipping route for global energy supplies.
BP’s trading unit, part of its customers and products division, reported earnings of approximately $2.5 billion for the quarter, reflecting “exceptional” performance amid heightened market volatility. Analysts noted that such conditions create opportunities for traders due to sudden price swings and increased hedging demand from sectors like airlines.
Chief Executive Officer Meg O’Neill, who took the helm in early April, described the results as a positive start to her tenure. She emphasized ongoing efforts to simplify the company’s structure by clearly separating upstream and downstream activities and focusing on unlocking growth and improving returns. O’Neill acknowledged the challenges posed by operating in a complex environment marked by conflict and volatility, highlighting BP’s commitment to maintaining safe and efficient production processes.
Despite the strong financial performance, BP flagged that underlying oil and gas production was expected to remain flat in 2026, citing disruptions in key Middle Eastern operations, including in Abu Dhabi, Oman, and Iraq, which collectively produce around 309,000 barrels per day. The company is closely monitoring developments in the region, given their potential impact on output.
Shareholders recently expressed concern over BP’s climate transparency and governance, largely opposing two board proposals at the company’s annual general meeting. One sought to reverse previous climate-related disclosure requirements, while another aimed to move shareholder meetings exclusively online. The chairman, Albert Manifold, faced a notable level of dissent, with nearly 18 percent of votes against his re-election.
Financially, BP’s net debt rose to $25.3 billion in the quarter from $22.2 billion at the end of 2025, influenced by increased inventory levels and longer shipping routes due to Middle Eastern disruptions. The company plans to accelerate debt reduction through asset sales and operational improvements, targeting a net debt range of $14 billion to $18 billion by the end of 2027.
The company declared a quarterly dividend of 8.32 cents per share, unchanged from the previous quarter. BP’s shares rose modestly on the London Stock Exchange following the earnings announcement, reflecting investor optimism about the group’s strategic direction amid ongoing energy market uncertainties.