BP has come under fire after revealing that its profits more than doubled in the first three months of the year, driven by the soaring cost of crude oil resulting from the Iran war.
Profit surge details
The FTSE 100 company reported its preferred profit measure – underlying replacement cost profit – surged by over 130% to a better-than-expected 3.2 billion US dollars (£2.4 billion) in the first quarter. This compares with 1.38 billion US dollars (£1.02 billion) a year earlier and 1.54 billion US dollars (£1.13 billion) in the previous three months. Most analysts had anticipated first-quarter profits of 2.67 billion dollars (£1.97 billion).
Criticism from campaigners
Campaigners accused the group of profiting at the expense of households, who have faced skyrocketing fuel prices at the pumps and are set to see energy bills increase further when the price cap is next 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 called for a windfall tax on firms profiting from the Iran-related energy crisis. The campaign group’s coordinator, Simon Francis, 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’s response
BP’s new chief executive, Meg O’Neill, who took over on April 1, said the group was ensuring fuel supplies are met across the UK. She commented: “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 context
Oil prices have risen sharply since the US-Israel war on Iran started on February 28 and are now more than 60% higher so far this year. Brent crude reached close to 120 dollars a barrel at one stage and, despite falling back, remains above the 100 dollars level as peace talks falter and amid fears over a looming global energy supply crisis.
BP’s update showed that its customers and products division – including 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 oil prices.
