BP PLC has reported a sharp increase in second-quarter net profit, reaching $5.7 billion, compared to $2.35 billion in the same period last year, far surpassing market expectations of $5 billion. The surge was driven by rising international energy prices triggered by geopolitical conflict between the US and Iran.
The robust results were part of a broader trend, with major US and European energy companies reporting massive profits, prompting public criticism from the US government over alleged profiteering. The financial data shows that BP PLC's underlying replacement cost profit, a key measure of net earnings, saw significant sequential and year-on-year improvements thanks to high global oil prices and strong performance in its upstream business.
The company posted operating cash flow of $10.9 billion for the quarter, reduced net debt to $22.25 billion, and announced a 4% increase in its quarterly dividend to 8.66 cents per ordinary share.
Other energy giants also experienced explosive growth in the second quarter. Exxon Mobil recorded net income of $14.5 billion, doubling year-on-year, while Chevron reported a surge in profit to $12 billion, nearly quadrupling from a year ago. The profit boom comes amid ongoing disruptions to energy supply and transport in the Middle East due to escalating US-Iran tensions. The Strait of Hormuz, a vital chokepoint for about one-fifth of global oil and gas shipments, has seen transit impacted, driving up global commodity prices.
Confronted with high retail fuel costs, US President Donald Trump told reporters at the White House on August 3 that energy companies like Exxon Mobil and Chevron are "making too much money off of supply shortages" and reiterated demands for them to lower pump prices.
In response to political pressure and public scrutiny, BP PLC CEO Meg O'Neill acknowledged the financial strain on ordinary households but emphasized that oil is a globally priced commodity, with sales prices determined by international market trends. She stressed that the company is focused on enhancing the stability of its upstream production and downstream refining assets, adjusting its production structure to maximize supply of market-critical products like jet fuel and diesel.
To address debt pressures and geopolitical uncertainty, BP PLC is accelerating its asset divestment and structural simplification strategy. The company confirmed the completion of the sale of its Gelsenkirchen refinery in Germany and related operations to the Klesch Group, which is expected to reduce annual operating expenses by approximately $1 billion. Additionally, it has initiated the sale process for its biomethane business, Archaea Energy, further contracting non-core operations to refocus on its core oil and gas business.