British energy major BP has posted a surge in first-quarter profits, lifted by higher crude oil prices amid escalating conflict in the Middle East.
BP reported profit after tax of US$3.8 billion ($6.4b) for the January–March quarter, a major increase from US$687 million in the same period a year earlier, according to its London Stock Exchange earnings statement.
Its closely watched underlying profit more than doubled to US$3.2b from US$1.4b a year earlier, with the company attributing the result in part to “exceptional oil trading contribution”.
“Overall, our business continues to run well. This was another quarter of strong operational and financial delivery, and we made further progress towards our 2027 targets,” chief executive Meg O’Neill said.
O’Neill was appointed at the end of last year to replace Murray Auchincloss.
BP had already indicated in mid-April that it stood to benefit from rising oil prices, noting Brent North Sea crude averaged US$81.13 a barrel in the first quarter, up from US$63.73 in the previous quarter.
Oil markets have been highly volatile due to the conflict, with prices briefly approaching US$120 a barrel in March. BP traders were able to capitalise on these rapid price movements.
Market analysts said such volatility tends to favour trading desks. “Traders do best in periods of volatility as sharp swings in the price create gaps between buyers and sellers … and greater hedging demand from industries like the airline sector,” A.J. Bell head of markets, Dan Coatsworth, said.
“The highest quarterly profit in the best part of three years is not a bad way for new BP CEO Meg O’Neill to begin her tenure.”
BP shares rose 3% on Tuesday by midday (local time) on the London Stock Exchange.
The company has previously noted that each US$1 movement in the price of oil has a US$340 million impact on its annual operating profit before tax.
O’Neill said BP continues to focus on operational performance amid a complex global backdrop.
BP “has been working relentlessly to keep our assets producing safely, reliably and efficiently” while working “in an environment of conflict and complexity”, she said.