BP quarterly profit reaches 18-year high as refining margins surge

BP’s quarterly underlying replacement-cost profit rose to $8.46bn, its highest level since 2008, as conflict in the Middle East drove oil and gas prices higher and sharply increased refining margins, The Guardian and Sky News report. The result was almost four times BP’s $2.2bn underlying profit in the same quarter a year earlier. It also exceeded the $8.9bn recorded in 2008 only marginally below that earlier peak, according to The Guardian.

Sky News described the result as surpassing the level reached during the 2022 energy crisis. Chief executive Meg O’Neill called the period a “banner quarter” for BP’s refining business. She said the company benefited from strong margins at refineries it operates and from its underlying performance, allowing it to capture the opportunity created by market conditions.

The Guardian said the main boost came from the difference between the cost of crude oil and the price of refined products such as diesel and petrol. BP earned almost $47 for each barrel produced in its refining operations. Global oil prices remained below their 2022 peaks, but disruptions affecting refineries in the Gulf region and across Russia pushed fuel prices higher.

The rise has been felt by motorists in the UK. The RAC estimated diesel at 198.79p a litre and petrol at an average of 172.92p. The petrol figure was up from 132.83p in late February, before the latest Middle East conflict began, according to The Guardian.

BP’s earnings came shortly after Shell and TotalEnergies reported their strongest profits since 2022, also helped substantially by refining. The results have intensified criticism from climate campaigners, who argue that fossil-fuel companies are benefiting financially while households face higher energy and transport costs. Jonathan Noronha-Gant of Global Witness called BP’s profits “obscene” while civilians suffer from the war.

Friends of the Earth’s Danny Gross said BP was making large profits while maintaining its commitment to oil and gas and reducing renewable investment. Their comments were reported by The Guardian. The results arrive shortly before diplomats are due to meet in Antalya, Turkey, for the Cop31 UN climate summit.

The Guardian said recent disasters, including severe flooding in Nepal, are expected to feature prominently, while fossil-fuel-producing countries may resist demands for a transition to clean energy. The wider climate context cited by The Guardian includes deadly heatwaves, extensive fires in France and Scotland, and unusually warm Pacific waters associated with a developing El Niño. The report said scientists have linked emissions from major fossil-fuel companies to deadly heatwaves, while separate research estimated 50,000 excess deaths during Europe’s summer heat.

BP’s strong quarter also comes as UK energy secretary Miatta Fahnbulleh considers whether to allow drilling at the Rosebank oilfield in the North Sea. The government has already approved a licence for the Jackdaw gasfield. The company’s results therefore sit at the intersection of unusually profitable refining conditions, elevated fuel prices and continuing arguments over fossil-fuel investment.