BP reported its strongest quarterly profits in four years, with underlying replacement cost profit rising sharply after the company benefitted from higher energy prices linked to the ongoing Iran war.
Investors are watching closely.
Quarterly earnings hit new high
The FTSE 100 oil major said the profit measure jumped about 78 percent to £4.2 billion for the second quarter of 2026, compared with the previous three‑month period. The increase was driven mainly by the refining and trading segments, which saw price gains as the Middle East conflict pushed global oil markets higher.
BP’s new chief executive, Meg O’Neill, highlighted the results as evidence that the company is “taking urgent action” to create more value for shareholders. She also announced a plan to divest the U.S. biogas unit, Archaea, as part of a broader effort to shed non‑core assets.
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Other major oil producers, including Shell and ExxonMobil, have posted similar profit upticks, citing the same geopolitical price drivers. The earnings boost comes at a time when the industry is under pressure to improve cost efficiency and address rising shareholder expectations.
Strategic shifts and asset sales
BP’s leadership is pursuing a series of sales and restructurings. Last week the company confirmed it is putting its UK North Sea business up for sale after six decades of production. The move is intended to free capital for investments that align with the current strategy.
In addition to the North Sea divestiture, the firm plans to spin off its U.S. renewable natural gas operation, Archaea. The decision reflects a focus on core oil and gas activities while reducing exposure to segments considered peripheral to the long‑term outlook.
O’Neill said the firm “has not delivered consistently” and that past write‑offs have eroded value. She added that the company’s cost structure and liabilities are not resilient enough in a low‑price environment, prompting the current restructuring drive.
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From a practical standpoint, these moves could mean fewer jobs in the regions where the sold‑off units operate, while investors may see a clearer balance sheet. The shift also signals that BP is betting on its traditional energy portfolio rather than expanding into newer, greener markets at this stage.
Campaign groups have criticized the profit surge, accusing BP of profiting from a “climate crisis.” Rosie Downes, head of campaigns at Friends of the Earth, argued that “while BP banks another round of enormous profits, millions of households are paying the price through sky‑high energy bills and a climate crisis accelerating rapidly out of control.” The group suggests that the company’s focus on asset sales, rather than expanding renewable capacity, undermines broader climate goals.
The company’s financial filing notes that the profit increase is “primarily attributable to higher realized margins in the refining and trading divisions.”
Analysts note that the profit surge may be temporary, tied to the specific price environment created by the Iran conflict. Should geopolitical tensions ease, the earnings boost could recede, leaving BP to rely on its restructuring plan for sustained growth.