BP profits reach 18-year high as Iran conflict drives refining margins upward

Profit beats expectations

BP’s third-quarter underlying replacement-cost profit reached $8.46bn, the company’s highest in almost two decades. Analysts had expected $7.3bn. BP attributed the result to strong margins at its operated refineries and stronger underlying performance. The company said it had captured opportunities presented by the market.

Disruption raises fuel costs

Global oil prices have remained below peaks seen during the 2022 energy crisis, but fuel prices including diesel have reached record highs in the UK, Europe and the US in recent months. The article attributes this to major refinery disruptions in the Gulf region and across Russia.

Refineries have been running close to capacity to offset shortfalls, while shipping has taken longer and different routes. Releases from strategic and commercial reserves have also helped bridge supply gaps.

Campaigners condemn windfall

The increase in profits angered climate campaigners. Jonathan Noronha-Gant of Global Witness called it “obscene” that oil companies were profiting from the Iran war while civilians suffered. Danny Gross of Friends of the Earth said households were facing a difficult winter as they struggled with bills, while BP made large profits and reduced investment in renewables. He also criticised the company for continuing to expand oil and gas production.

Cash plans and strategy ahead

BP is expected to present its first major strategy update under O’Neill on 15 December. Market observers expect it to address plans for oil and gas production growth and a possible return to share buybacks from next year.