BP announced a sharp jump in first-quarter profits today (Tuesday), driven by rising oil prices following fighting between Iran and regional actors and disruptions to maritime trade routes.
According to published reports, the company’s underlying operating profit stood at $3.198 billion, more than double the $1.381 billion recorded in the same period last year. The figure also beat market forecasts of around $2.7 billion.
The company said the profit surge came in part from “exceptional oil trading,” as Brent crude prices have remained unusually high since early March, following the effective closure of the Strait of Hormuz—a strategic waterway through which roughly 20% of global oil and liquefied natural gas supplies pass.
Despite the sharp price increase, the reports noted that the company did not benefit from high prices throughout the entire quarter, with only part of the period characterized by prices above $100 per barrel. In practice, the average price recorded stood at around $82.80 per barrel for Brent.
BP estimates that profits could continue to rise if high price levels persist, especially since the full impact of the price increase has not yet been reflected in current reports.
The company also noted that most of its production activity takes place in North America, allowing it to benefit from high prices while experiencing relatively limited damage from fighting in the Middle East, though it stressed that production and profit margins remain sensitive to developments in the region.
Meanwhile, the company’s stock rose about 2.5% on the exchange following the reports.
At the same time, the issue of taxation on energy companies continues to be a focus of public debate, with BP paying an effective tax rate of 43% on its overall profits, and 78% on its North Sea operations, under the windfall profits tax imposed after the Russia-Ukraine war.