British energy giant BP has reported its highest quarterly profits in 18 years, driven by rising oil and gas prices amidst conflict in the Middle East. The company’s underlying replacement cost profit soared to $8.46 billion in the latest quarter, significantly surpassing the $2.2 billion reported in the same period last year and exceeding analysts’ expectations of $7.3 billion.
The surge in profits was largely attributed to BP’s refining operations, where the gap between crude oil costs and the prices of refined fuels like petrol and diesel expanded sharply. BP capitalized on higher margins as disruptions in energy supplies from the Gulf region and Russia added pressure to global fuel markets. Chief Executive Meg O’Neill described the period as a “banner quarter” for refining, noting that refineries were operating near capacity and adjustments in shipping routes, along with releases from reserves, helped address supply shortages.
This profit increase comes as consumers in the United Kingdom, Europe, and the United States face rising fuel costs. In the UK, diesel prices have escalated to approximately 198.79 pence per litre, with petrol reaching an average of 172.92 pence per litre, compared to 132.83 pence in late February.
The results have drawn criticism from environmental groups, who argue that oil companies are profiting from a conflict that has caused suffering for civilians and consumers. They also express concern over the impact of high energy prices on households struggling with living costs and heating bills.
BP has announced its intention to use the additional cash flow from its profits to settle its remaining liabilities related to the 2010 Deepwater Horizon oil spill. The company has recently agreed to a $350 million accelerated payment to Louisiana to resolve claims associated with the disaster and conclude long-standing litigation over coastal damage.
Looking ahead, BP is expected to unveil a major strategy update on December 15 under O’Neill’s leadership. Investors are anticipating details about the company’s future oil and gas production plans and the potential resumption of share buybacks in the coming year. Additionally, BP is considering the sale of its UK North Sea oil and gas assets, a deal estimated to be worth between £2 billion and £2.5 billion, which includes several major production hubs, though final terms and potential buyers are yet to be determined.