BP's bumper profits show Ed Miliband is right – we need to go green. BP's windfall is less about business brilliance and more about global instability. As oil prices surge again, the bigger story is Britain's continued vulnerability to fossil fuel shocks.
Geopolitics, Not Business Brilliance
BP didn't earn this windfall – geopolitics handed it over. The oil giant powered past last year's numbers in a matter of weeks, then comfortably beat analyst expectations for the first quarter, making $3.2bn (£2.4bn) in profit. Yes, traders played their part. But this “astronomical” result, as critics have labelled it, was driven primarily by surging global oil prices amid tensions involving Iran – not anything BP itself did. As if to underline the point, Brent crude surged past $110 a barrel in early trading.
Miliband's Defence
Which brings us to Ed Miliband. He has become a tabloid bogeyman – the high priest of net zero in Cabinet, driving Britain's green transition, to the fury of some quarters. But if he were tried in the court of public opinion, BP's results would make a compelling defence exhibit. Every spike in oil prices flows straight through to company profits. And those profits are funded, in no small part, by motorists and households paying more at the pump and on their bills.
We've seen this before. When Russia invaded Ukraine, oil and gas prices rocketed at a pace that outstripped even NASA's Artemis missions. Prices have eased since, but they remain structurally higher than before the crisis. And with fresh instability, they are rising again. BP, meanwhile, is awash with cash – and can likely shrug off investor discontent after its failed attempt to roll back green reporting commitments.
The Cycle of Instability
Even in a best-case scenario – say, diplomatic efforts keep the Strait of Hormuz open – price relief would not be immediate. And it would be naïve to assume this cycle won't repeat. That is why the broader direction of travel set by the energy secretary matters. The UK must reduce its exposure to volatile fossil-fuel markets. But the real battleground is cost – and who pays.
In her last Budget, chancellor Rachel Reeves shifted green levies off household bills and into general taxation, saving consumers around £150 on average. That was politically smart – but economically incomplete. Businesses were left out. And businesses don't absorb costs – they pass them on. Higher energy bills mean higher prices, tighter margins, frozen hiring and, in some cases, job losses. An economy already struggling for momentum cannot afford that drag.
Path Forward
The state cannot absorb all transition costs – that simply isn't affordable. But nor can it pretend the current balance works. Targeted relief for energy-intensive firms, even if temporary, would ease the pressure while longer-term market reforms – reducing the role of gas in price-setting – grind forward. Handled well, that could strengthen public backing for Miliband's agenda and blunt the calls for a North Sea drilling revival.
Because more drilling is no silver bullet. The basin is mature, costs are high, and most output is sold on global markets anyway. Even a dramatic increase in production would barely dent UK energy bills. Meanwhile, the downsides are clear: pollution, poor air quality, rising respiratory illness, and a warming planet. As Arnold Schwarzenegger once put it: two sealed rooms, two running cars – one petrol, one electric. Which would you choose to stand in?
Britain has alternatives. Wind is abundant. Solar remains underused. Even nuclear – costly and contentious – is a cleaner long-term bet than continued reliance on fossil fuels. Projects like Hinkley Point C and Sizewell C may be expensive, but their output will still prove less damaging, and ultimately more stable, than hydrocarbons.
If Miliband succeeds, future BP windfalls driven by geopolitical shocks may matter far less to British households. That is the goal. Until then, every oil spike will keep delivering the same message: Britain is still paying for crises it cannot control.
