BP announced an "exceptional" performance from its oil trading desk during the first quarter of 2026, primarily due to a significant surge in oil prices following the start of the Iran war in late February. This strong performance, similar to that reported by rival Shell, is expected to contribute to substantial windfalls for oil majors amidst choked global supplies and skyrocketing oil and gas prices. Brent crude averaged $81.13 per barrel in Q1 2026, a notable increase from $63.73 per barrel in Q4 2025. Current prices for U.S. crude oil futures and international benchmark Brent are around $97 and $98.6 per barrel, respectively.
Despite the robust trading performance, BP also informed investors that its net debt at the end of the first quarter is projected to be in the range of $25 billion to $27 billion. This represents an increase from $22.2 billion at the end of the fourth quarter of 2025. The rise in net debt is attributed to the increased working capital requirements in a more volatile price environment. BP's first-quarter results are scheduled to be published on April 28.
BP's profits more than doubled in the first three months of the year, reaching $3.2 billion, significantly higher than analysts' expectations and the $1.38 billion reported in the same period last year. The customers and products division, which includes oil trading, saw its profits surge to $2.5 billion from just $103 million a year ago. Susannah Streeter, chief investment strategist at Wealth Club, noted that BP's trading division "thrived in an environment of wild swings, leading to high velocity trading." The oil price has seen sharp swings since the start of the U.S.-Israel war with Iran, with Brent reaching nearly $120 at one point and currently standing around $110 a barrel. This volatility has widened the gap between buying and selling prices, allowing traders to make bigger profits.
BP's share price rose 3% on Tuesday and is up approximately 20% since the Iran war began. However, BP's production is not immune to the conflict, with anticipated lower production between April and June partly due to disruptions in the Middle East. Upstream production, including oil and gas extraction, has been flat. Chancellor Rachel Reeves highlighted that the performance of energy companies justifies the extended Energy Profits Levy to tax windfall profits appropriately. The company, under new CEO Meg O'Neill, also expects impacts on financial results and working capital movements due to heightened volatility in crude oil, natural gas, and refined products prices.
While the strong trading performance is expected to continue for some time, the general global uncertainty remains. BP noted that every dollar movement per barrel in oil prices leads to a $340 million impact on pre-tax operating profits. The increase in net debt is also explained by the need for more cash to hold the same barrels and maintain trading activity as oil prices rise. Before the conflict, Brent crude was around $73 a barrel, highlighting the significant impact of the war on oil prices and ultimately BP's financial results.
