BP’s profit surges due to high energy prices

BP PLC became the latest oil major to cash in on the highest energy prices in over a decade, reporting second-quarter solid profit helped by fuel-making margins and oil trading.

London-based BP said its underlying replacement-cost profit, a metric similar to net income that US oil firms report, was $8.5 billion. That compared with a $6.8 billion average projection of 28 analysts compiled by BP.

The results come after BP reported a loss in the first quarter tied to the company’s decision to exit its Russia holdings. Aside from that hefty one-time accounting charge, BP and other large oil-and-gas firms have been mounting a strong recovery from the pandemic, which decimated demand.

BP said it would increase its quarterly dividend by 10% and is on track for planned annual dividend increases of about 4% through 2025. The oil firm said it would buy back another $3.5 billion in shares by third-quarter results.

Last week, Chevron Corp, Shell PLC, and Exxon Mobil Corp, the three largest Western oil firms, banked a record $46 billion in collective profits in the second quarter. Historically high margins on furl-refining are following cutbacks in global fuel-making capacity during COVID-19 lockdowns, when travel and manufacturing slowed, sapping demand.

Major oil firms have faced political heat in Europe and the US over bumper profits while consumers are shouldering the pain of higher prices for heating their homes or filling up at gas stations. Oil firm executives have said that soaring profits from traditional businesses are helping them invest in lower-carbon projects as they transition to renewable energy. Still, those parts of their businesses—and their profits—remain small.