BP earnings beat expectations; stock up 32% amid oil price surge

British energy giant BP saw its first-quarter profits more than double from the previous year, the company reported on Tuesday, citing the sharp increase in oil and gas prices fueled by the ongoing Middle East conflict.

The oil giant reported a robust financial performance for the first quarter, posting an underlying replacement cost profit a metric analogous to net profit, of $3.2 billion. 

The figure significantly exceeded the market's anticipation, as analysts polled by LSEG had only projected a consensus profit of $2.63 billion, demonstrating a strong beat on earnings expectations.

Conflict drives profits and exceeds expectations

BP's first-quarter results demonstrated significant growth, primarily driven by "exceptional" oil trading contributions and robust midstream performance. 

The company reported a net profit of $1.38 billion, a substantial increase compared to $1.54 billion in the final quarter of the previous year.

This strong performance highlights the success of their strategic operational and trading activities in the energy market.

“Overall, our business continues to run well. This was another quarter of strong operational and financial delivery, and we made further progress towards our 2027 targets,” BP CEO Meg O’Neill said in a statement.

BP's recent earnings report arrives amidst a period of substantial financial uplift for the entire oil and gas sector.

This significant boost in share prices and overall profitability is directly attributed to the dramatic increase in fossil fuel prices.

The surge in energy costs has been ongoing since the commencement of the conflict, which began on February 28. 

This geopolitical event has created significant instability in key energy-producing regions, leading to a tight supply-demand dynamic and consequently driving crude oil and natural gas prices to new highs, benefiting major players like BP.

The ongoing and severe disruption in the strategically vital Strait of Hormuz is creating what the International Energy Agency has deemed the greatest energy security threat in history.

Brent crude oil prices were trading above $103 per barrel at the time of writing. 

After years of relatively poor performance, BP's shares have recovered significantly over the last 12 months.

This resurgence comes after the company was the focus of considerable takeover rumors following its period of underperformance.

The London-listed stock has continued its strong rally into 2026.

BP's shares have surged by over 32% this year, positioning the company as the second-best performing stock among the top five oil supermajors, trailing only France’s TotalEnergies.

Financial resilience and future outlook

BP's net debt rose to $25.3 billion by the end of the first quarter, up from $22.18 billion at the end of the previous year.

The company has set a target to reduce this net debt to a range of $14 billion to $18 billion by the end of next year.

Looking ahead, BP expects its reported upstream production to be lower compared to the first quarter due to seasonal maintenance and disruptions in the Middle East.

The company reiterated its 2026 capital expenditure guidance of $13 billion to $13.5 billion.

Additionally, BP projects to receive $9 billion to $10 billion in proceeds from divestments and other sources throughout the year.