BP reports ‘horrifying’ jump in profits as Iran war boosts oil trading; Brent crude hits three-week high – business live
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy,The Iran war has helped BP to double its profits in the first quarter of this year, its latest financial results show,The oil major has just reported that it made a profit of nearly $3,2bn in the first three months of 2026, on its favoured ‘underlying replacement cost’ earnings measure,That’s higher than City analysts had predicted, with BP - which was hit by a shareholder rebellion last week – giving some of the credit to an “exceptional” contribution from its oil trading operations.
These quarterly profits are up from $1.54bn in the fourth quarter of 2025, and $1.38bn in the first quarter of last year.Q1 2026 includes the surge in oil and gas prices in March, after the war began at the end of February, disrupting energy supplies from the region.BP’s new CEO, Meg O’Neill, acknowledges the impact of the Middlle East conflict, saying the company is working in an “environment of conflict and complexity”.
O’Neill says BP is “working with customers and governments to get fuel where it’s needed” – at a time when fears of jet fuel shortages are growing.She adds:double quotation markOverall, 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.We had high plant reliability, high refining availability and increased production in the Gulf of America and at bpx Energy, our US onshore business - keeping production levels steady despite the ongoing disruption.The surge in energy prices is worrying central banks, many of whom are setting interest rates this week.
Overnight, the Bank of Japan left borrowing costs unchanged, but three policymakers did break ranks and vote for a hike….10am BST: ECB survey of Consumer Inflation Expectations in the eurozone2pm BST: US house price data: S&P/Case-Shiller Home Price MoM3pm BST: US consumer confidence dataAlthough BP enjoyed that ‘exceptional’ oil trading in the last quarter, it is not immune to the damage and destruction wreaked on facilities across the Gulf, warns Susannah Streeter, chief investment strategist at Wealth Club.The second quarter of this year is set to be weaker due to the disruption, Streeter explains:double quotation markThe Rumaila oil field in Southern Iraq which it operates as part of a partnership was first closed as a precaution and then struck by drones.Then there’s the overall disruption expected as cargoes mount up and the Strait of Hormuz remains closed.So, while volatile energy prices are set to continue to benefit the trading division, there’s going to be a tale of repair and maintenance costs to bear going forward.
There’s also still the huge uncertainty surrounding future transit through the Strait of Hormuz, with potential tolls still on the table, that’s once the tankers are able to navigate mines planted in the waterway.Shares in some specialist lenders are dropping this morning, after the Guardian reported that Rachel Reeves is considering imposing a one-year rent freeze on private sector homes, to protect renters from the cost of living crisis.OSB Group are down 4% and Paragon Banking has dropped by 2.6% – both companies provide buy-to-let mortgages, where demand could weaken if rent controls are brought in.BP’s surging profits could lead to calls for tougher windfall taxes on the energy sector, suggests Mark Crouch, market analyst for eToro: double quotation mark“BP’s first-quarter earnings offer a timely reminder of just how abruptly the pendulum can swing in the energy sector.
Underlying profits jumped to $3.2 billion, boosted by a powerful mix of elevated prices and exceptional trading conditions, even as disruptions in the Middle East weighed modestly on operations.In many respects, BP has both absorbed and benefited from the same geopolitical tensions, with volatility once again proving a tailwind for an integrated major.“Refining performance remains robust, and BP’s scale in trading and downstream is clearly being monetised at the right point in the cycle.Combined with shares having touched a 16-year high as recently as March, the market is already showing a greater willingness to back the UK supermajor.
While net debt has crept up in the near term, BP’s commitment to deleveraging and disciplined capital allocation should provide a clearer path for shareholder returns.“The political backdrop, though, remains hard to ignore.Stronger profits, particularly those linked to geopolitical disruption, are likely to revive calls for windfall taxes across Europe as household budgets get squeezed.The UK already imposes one of the most aggressive regimes globally, leaving BP walking a fine line between capital discipline, shareholder returns and an increasingly complex fiscal backdrop.”BP is walking “a tightrope” after its profit bonanza in the first quarter of the year, reports Chris Beauchamp, chief market analyst at investing and trading platform IG:double quotation mark“BP’s surge in profits will have other sectors green with envy, but the situation gets trickier from hereTrump’s war has delivered a bonanza for the company and its shareholders, but it is uncomfortably aware that, while oil prices are likely to stay elevated, it is likely to face major disruption due to that same conflict.
A lot of that might be offset by higher oil prices, and the shares have taken the optimistic view in early trading.”Those BP shares are now up 2.8%, still leading the risers on the FTSE 100 share index this morning.Elsewhere in the energy industry, the sale of the Prax Lindsey oil refinery in north Lincolnshire to US energy company Phillips 66 has been completed.Back in January, Phillips 66 struck a deal to buy the Prax site after the company collapsed into administration last summer, and integrate it with its nearby Humber refinery.
The deal will save some jobs at Prax,Of the remaining employees at the sites, 109 have been retained by Phillips 66, and 55 will be made redundant, according to the Insolvency Service,Official Receiver Gareth Allen says:double quotation markThe sale of Lindsey Oil Refinery’s assets following a liquidation is the best possible outcome, and this is now complete,My thanks to the team at the Insolvency Service and the special managers at FTI Consulting LLP,I am grateful for the commitment, patience and understanding of the leadership team and employees at the site during this time.
Although rising energy prices are great news for oil and gas producers, they’re a blow to other businesses, such as housebuilders.This morning, Taylor Wimpey has reported that the cost of building a home is being pushed up, telling shareholders:double quotation markAs a result of rising energy costs, build cost inflation is now expected to be low to mid single digit for 2026, with cost pressure and surcharges starting to come through from our supply chain.The company also reported a small slowdown in sales, which are running at 0.74 per outlet per week so far this year, down from 0.77 at this stage of 2025.
Shares in Taylor Wimpey are down 4%, with other housebuilding stocks such as Persimmon (-2,2%) and Barratt Redrow (-1,1%) also lower this morning,Shares in BP have jumped at the start of trading in London,BP are leading the risers on the FTSE 100 share index, up 2.
1% at 584p, their highest level in over a week,BP has reported “strong numbers” this morning, says RBC Capital Markets, beating market expectations by 20%,RBC Capital Markets told clients:double quotation markLooking divisionally, the star of the show was the downstream, with BP reporting higher refining & trading numbers, well in excess of consensus and ~$200m ahead of our estimates for the quarter, supported by exceptional oil trading results,It is also notable that Castrol reported the highest earnings since before 2019 this quarter, however we question whether some of this is driven by temporary factors given gyrations on feedstock/product pricing over the course of March,This chart, from BP’s financial results this morning, shows how profits surged in the first quarter of this year:On BP’s profit surge, Mike Childs, head of science, policy and research at Friends of the Earth, says:double quotation mark“Just as we saw in 2022 following Russia’s invasion of Ukraine, fossil fuel giants are quid’s 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.“If we’re to reduce our vulnerability to energy price shocks, the solution couldn’t be clearer.We must end our reliance on volatile, costly oil and gas by rapidly ramping up investment in cheap, clean, homegrown renewables alongside support for energy efficiency measures.The deadlock in the Middle East confict has pushed the Brent crude oil price up to a three week high today.Brent crude is up 1.
75% at over $110 a barrel, for the first time since the US-Iran ceasefire was agreed on 7 April.There are reports overnight that President Donald Trump is unhappy with an Iranian proposal to end the conflict, and reopen the strait of Hormuz, because it did not address Iran’s nuclear program.One US official has been quoted saying:double quotation mark“He doesn’t love the proposal.”Maja Darlington, climate campaigner for Greenpeace UK, says:double quotation mark“The oil industry’s capacity to profiteer from human misery is almost limitless.Seventy years after the US first achieved regime change in Iran as a favour to BP, here we are again, risking a global recession by trying to install the West’s man in a petrostate that will do anything to prevent it.
It’s been an entirely predictable disaster for everyone except the oil industry.BP’s profits are booming, with Trump’s bombs bringing billions for them and bigger bills for us.Britain subsidizes this industry to the tune of several billion a year, and yet they’ll still claim to be over taxed.Today’s numbers make a convincing case that the opposite is true.Campaign group Global Witness point out that the Middle East conflict is the second event to give BP ‘bumper profits’ in the last four years.
Patrick Galey, head of news investigations at Global Witness, said:double quotation mark“It is horrifying to see BP’s profits grow as millions suffer the fallout from the US-Israel war on Iran.Unfortunately we’ve been here before – when Russia invaded Ukraine 4 years ago we saw big oil firms make bumper profits from spiralling fuel costs.As oil prices drive up bills once again, it’s clear that fossil fuel companies don’t enhance affordability or energy security, they make life worse.They destroy the climate, push up the cost of living, and rake in billions in profit while innocent civilians die.It’s well overdue that we make oil companies pay for the damage their doing.
If they broke it, they need to fix it.It’s clear they can afford to.BP profits, we all pay.”Looking ahead, BP expects a drop in fossil fuel production in the current quarter, partly due to the Iran war.It says:double quotation markLooking ahead, bp expects second quarter 2026 reported upstream production to be lower compared with the first quarter 2026, due to seasonal maintenance predominantly in the Gulf of America and the effects of disruption in the Middle East.
It also expect volumes and fuels margins to “remain sensitive to conditions and developments in the Middle East”.Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.The Iran war has helped BP to double its profits in the first quarter of this year, its latest financial results show.The oil major has just reported that it made a profit of nearly $3.2bn in the first three months of 2026, on its favoured ‘underlying replacement cost’ earnings measure.
That’s higher than City analysts had predicted, with BP - which was hit by a shareholder rebellion last week – giving some of the credit to an “exceptional” contribution from its oil trading operations.These quarterly profits are up from $1.54bn in the fourth quarter of 2025, and $1.38bn in the first quarter of last year.Q1 2026 includes the surge in oil and gas prices in March, after the war began at the end of February, disrupting energy supplies from the region.
BP’s new CEO, Meg O’Neill, acknowledges the impact of the Middlle East conflict, saying the company is working in an “environment of conflict and complexity”,O’Neill says BP is “working with customers and governments to get fuel where it’s needed” – at a time when fears of jet fuel shortages are growing,She adds:double quotation markOverall, 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,We had high plant reliability, high refining availability and increased production in the Gulf of America and at bpx Energy, our US onshore business - keeping production levels steady despite the ongoing disruption.
The surge in energy prices is worrying central banks, many of whom are setting interest rates this week.Overnight, the Bank of Japan left borrowing costs unchanged, but three policymakers did break ranks and vote for a hike….10am BST: ECB survey of Consumer Inflation Expectations in the eurozone2pm BST: US house price data: S&P/Case-Shiller Home Price MoM3pm BST: US consumer confidence data