BP has faced fierce criticism after revealing that its profits more than doubled in the first three months of the year, driven by the surging cost of crude oil amid the ongoing conflict with Iran.
Record-breaking quarterly results
The FTSE 100 energy giant reported that its underlying replacement cost profit, its preferred measure of earnings, surged by over 130% to $3.2 billion (£2.4 billion) in the first quarter. This compares with $1.38 billion (£1.02 billion) in the same period last year and $1.54 billion (£1.13 billion) in the previous three months. The figure significantly exceeded analysts' expectations, who had forecast profits of $2.67 billion (£1.97 billion).
Campaigners condemn profiteering
Campaign groups have accused BP of profiting at the expense of households, which are already grappling with soaring fuel prices at the pumps and face further increases in energy bills when the price cap is updated on July 1. Mike Childs, head of science, policy and research at Friends of the Earth, said: "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 has called for a windfall tax on companies profiting from the Iran-related energy crisis. Simon Francis, the coalition's co-ordinator, stated: "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
BP's new chief executive, Meg O'Neill, who took over on April 1, defended the company's performance, emphasising its commitment to maintaining fuel supplies across the UK. She said: "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 surge and market impact
Oil prices have skyrocketed since the US-Israel war on Iran began on February 28, rising more than 60% so far this year. Brent crude briefly approached $120 a barrel and, despite some retreat, remains above $100 as peace talks stall and fears of a global energy supply crisis intensify. BP's customers and products division, which includes its oil trading unit, reported profits of $2.5 billion (£1.84 billion), compared with $1.4 billion (£1.03 billion) in the previous quarter and just $103 million (£76.2 million) a year ago, as traders capitalised on highly volatile oil prices.
BP's shares rose a further 3% in Tuesday morning trading, with the stock climbing more than a third over the past six months, buoyed by the crude rally. Maja Darlington, climate campaigner for Greenpeace UK, commented: "The oil industry's capacity to profiteer from human misery is almost limitless. 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."
