BP has faced fierce criticism after reporting that its profits more than doubled in the first three months of the year, driven by the surge in crude oil prices resulting from the conflict with Iran.
Profit surge exceeds expectations
The FTSE 100 energy giant posted an underlying replacement cost profit of 3.2 billion US dollars (£2.4 billion) for the first quarter, a rise of over 130% compared with 1.38 billion dollars (£1.02 billion) a year earlier. This also surpassed the 1.54 billion dollars (£1.13 billion) recorded in the previous three months. Analysts had forecast profits of 2.67 billion dollars (£1.97 billion), making the actual figure significantly higher than anticipated.
Campaigners condemn profiteering
Campaign groups accused BP of benefiting at the expense of households, which are already grappling with soaring fuel prices and face further increases in energy bills when the price cap is updated on 1 July. Mike Childs, head of science, policy and research at Friends of the Earth, stated: "Just as we saw in 2022 following Russia's invasion of Ukraine, fossil fuel giants are quids in when global instability drastically inflates fuel prices. But again, it's ordinary people who pay the price when soaring energy prices threaten to plunge the UK into an even deeper cost of living crisis."
The End Fuel Poverty Coalition called for a windfall tax on companies profiting from the Iran-related energy crisis. Coordinator Simon Francis remarked: "These astronomical profits are a startling reminder that when conflict drives up the price of oil and gas, energy companies profit and households pay."
BP defends its role
Meg O'Neill, BP's new chief executive who took over on 1 April, defended the company's performance, saying: "The teams across BP are playing their part to keep oil, gas and refined products flowing during an incredibly challenging time – focused on maintaining safe, reliable and cost-efficient operations." She added: "We are working with customers and governments to get fuel where it's needed, helping minimise disruption and the impact it can have on people's lives."
Oil price rally continues
Oil prices have risen sharply since the US-Israel war on Iran began on 28 February, climbing more than 60% so far this year. Brent crude briefly approached 120 dollars a barrel and, despite some retreat, remains above the 100-dollar mark as peace talks stall and fears of a global energy supply crisis mount. BP's customers and products division, which includes its oil trading unit, reported profits of 2.5 billion dollars (£1.84 billion), compared with 1.4 billion dollars (£1.03 billion) in the previous quarter and just 103 million dollars (£76.2 million) a year ago, as traders capitalised on highly volatile prices.
Shares climb further
The group's shares rose another 3% in Tuesday morning trading, bringing the stock's gain over the past six months to more than a third, buoyed by the crude rally. Maja Darlington, climate campaigner for Greenpeace UK, said: "The oil industry's capacity to profiteer from human misery is almost limitless." She added: "Britain subsidises this industry to the tune of several billion a year, and yet they'll still claim to be over-taxed. Today's numbers make a convincing case that the opposite is true."
