BP (BP.) has reported a first-quarter profit of $3.2bn (£2.4bn), well ahead of the $2.7bn consensus forecast and the previous year’s $1.4bn result.
The gains came from the trading division, which had an “exceptional” performance, BP said, as global energy markets reacted to the US attack on Iran at the end of February. The profit measure was underlying replacement cost profit, BP’s preferred measure.
Its pretax profit was $7.4bn, more than double the Q1 2025 figure. The average oil price realisation for the company was only up slightly in Q4, BP said, at $60 per barrel compared to $57. Brent crude averaged $81 per barrel in Q1, up from $63 per barrel in Q4.
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New chief executive Meg O’Neill highlighted the steady production despite the Gulf disruption, with output climbing at US onshore and offshore assets.
“We had high plant reliability, high refining availability and increased production in the Gulf of America and at BPX Energy,” she said.
Refining and trading was where the difference in profits came – the underlying RC profit before interest and tax was $2.2bn, compared with $13mn a year ago. This was because of “significantly higher” realised margins, BP said.
The refining indicator margin average for the quarter rose from $8 per barrel to almost $17. The major added that retail fuels margins had fallen.
BP shares have outperformed competitors in recent weeks as investors looked for leveraged energy names to back. The back-to-basics approach of new chair Albert Manifold has also helped, alongside O’Neill’s arrival from Australian producer Woodside Energy (AU:WDS).
The company reported higher net debt as of 31 March compared to the end of 2025, at $25bn.
Given the higher oil and gas prices brought on by the war, BP’s balance sheet has become less of an investor focus.
Alongside the Q1 results, management announced it would put the proceeds of the Gelsenkirchen refinery sale into its hybrid bonds, cutting this by $4.3bn to $9bn by the end of 2027.
Hybrid bonds serve to cut gearing given they appear as equity on the balance sheet. “In our minds, this is the right move and is a first step to removing all of the hybrids,” said RBC analyst Biraj Borkhataria.
“We anticipate that in the current macro environment, this could also be completed sooner than the market anticipates.”