BP’s profit more than doubled in the first quarter as the war in Iran drove energy prices sharply higher.
On the same day that the British energy giant reported a banner financial performance, gasoline prices in the U.S. hit new multiyear highs, a point of increasing agitation for travelers, households and also businesses that are particularly sensitive to higher energy prices, such as airlines.
The near closure of the Strait of Hormuz off the coast of Iran is a flashpoint in the war and the source of much of the economic pain being felt globally. The Trump administration appeared unlikely Tuesday to accept Iran’s offer to end the war and reopen the strait if the U.S. lifts its blockade on the country.
About 20% of the world’s oil passes through the strait on a typical day, but the passage has been choked off since the war began in late February. The price for a barrel of Brent crude that cost about $73 on the day before the U.S. and Israel launched strikes on Iran, was trading for more than $104 Tuesday.
Given soaring energy costs the stellar performance from BP was anticipated, yet it still exceeded the heightened expectations of industry analysts for both profit and revenue.
It was BP’s first earnings report since the war began and the company is the first of the oil majors to post its financial performance, providing a preview of what to expect when other big drillers like Exxon Mobil, Chevron and ConocoPhillips report earnings later this week.
BP earned $3.84 billion, or $1.47 per share, for the first three months of the year, far exceeding last year’s $687 million, or 26 cents per share, the company said Tuesday. BP’s underlying replacement cost profit, which more closely mimics net income reported by U.S. companies, was $3.2 billion. BP has an expansive oil trading operation, so it may outpace other oil giants due to the current volatility in energy markets.
“The Middle East conflict created significant crude and refined products dislocations that BP’s integrated supply chain was positioned to monetize,” wrote James West, managing director and head of Energy and Power Research at Melius.
The London exploration and production company called the performance of its trading desk “exceptional.”
The average price of gasoline in the U.S. hit $4.18 on Tuesday, according to motor club AAA. That is the highest level since 2022, when Ukraine was invaded by Russia, and well over dollar more than a gallon cost one month ago. The war in Iran had been going on for a month at that time, but a gallon still cost less than $4.
Inflation in the U.S. rose sharply last month during largest monthly jump in gas prices in six decades, according to data from the U.S. Department of Labor. The surge in gas prices has squeezed the budgets of lower- and middle-income families, making it more difficult to pay for necessities.
But it’s disrupting businesses as well, particularly those sensitive to higher fuel costs. Airlines worldwide have begun canceling flights as the war in the Middle East strains jet fuel supplies and pushes up ticket prices.
The huge profits from BP generated online vitriol almost immediately.
In addition to posts from individual social media accounts, organizations weighed in as well.
“Families are being pushed to the brink by spiraling energy bills, while fossil fuel companies turn a war into a windfall,” wrote Clémence Dubois, global campaigns director at 350.org. “This is not just unjust, it’s unacceptable.”
Simon Francis, coordinator with End Fuel Poverty Coalition, wrote on Tuesday that, “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 shares rose more than 1% Tuesday, close to a 52-week high, as did the shares of other major oil producers.
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