BP toasts to ‘exceptional’ oil trading after Iran volatility
Energy giant BP has forecast “exceptional” results in its oil trading division after a period of volatility in prices triggered by the war in the Middle East.
The FTSE 100 oil major said upgraded its outlook on Tuesday, which marks a sharp recovery from the “weak” performance reported in the final quarter of 2025.
The anticipated surge in profit comes as global energy markets were rocked with heightened volatility, particularly in the latter half of the first quarter.
Brent crude prices – the international benchmark for oil prices – averaged $81.13 per barrel during the period, a significant jump from the $63.73 average seen in the fourth quarter of 2025.
The blocking of the Strait of Hormuz – a narrow waterway between the Persian Gulf and the Gulf of Oman where around a fifth of the world’s oil supply flows through – has been viewed as the top trigger for price volatility, with traffic halting since the war broke out at the end of February.
BP expects stronger refining margins – which measure the profit BP makes from converting crude oil into products like gasoline and diesel – to add between $100m and $200m to its bottom line compared to the previous quarter.
Though total production is tipped to remain broadly flat at approximately 2.34m barrels of oil equivalent per day.
Gas results are expected to be “average” with higher prices for natural gas expected to support the segment.
Iran war adds to BP’s debt pile
Whilst surging prices are set to fuel trading success, the effect will also hit BP’s debt pile. The blue-chip giant anticipates net debt to rise to between $25bn and $27bn, up from $22.2 billion at the end of 2025.
This increase is attributed to a whopping $4bn to $7bn in “working capital build,” with the company now holding higher-value inventory and managing the costs of operating in a high-price environment.
The update comes after new boss Meg O’Neil took the reins at the oil giant at the beginning of April.
BP said in December it would swap out previous boss Murray Auchincloss, who had been in the role since the start of 2024, for Woodside Energy chief O’Neil.
O’Neil was expected to have a “fight on her hands” in taking BP’s ongoing struggles on.
The notorious activist investor Elliott shored up a £3.8bn stake in BP, becoming the ailing oil major’s third-largest shareholder in 2025. The size of Elliott’s stake piled further pressure for a strategic overhaul.
BP revealed in January it would take a hit of up to $5bn in the final quarter of 2025 as the value of green energy projects withered. And in its fourth-quarter update the firm unveiled major cost-cutting initiatives as full-year profit fell 15.7 per cent to $7.5bn, down from $8.9bn recorded in 2024.
In the firm’s upcoming AGM, BP could be staring down its second consecutive revolt regarding scrutiny of its environmental policies. The company opted to exclude a resolution on climate targets filed by Dutch shareholder activist group Follow This, meaning O’Neil, alongside chairman Albert Manifold could be facing a test of strength.
Last year, nearly a quarter voted against the re-election of outgoing chair Helge Lund at the firm’s annual general meeting. as conflict intensified over BP’s decision to cut back on climate goals.