British oil and gas giant BP saw its second-quarter net profit fall fivefold year-on-year to $1.8 billion, suffering, like other oil majors, from the decline in hydrocarbon prices.
BP reports lower profits due to fluctuations in oil and gas prices
The result was affected by “fluctuations in oil, gas and refined product prices”, said BP in a statement, pointing in particular to “a weak oil trading performance” over the period, “significantly lower” refining margins and higher maintenance costs. Excluding non-recurring items, adjusted earnings, the market benchmark, came to $2.6 billion, more than three times the year-earlier figure.
Like other majors in the sector, BP had benefited a year ago from soaring oil and gas prices, in a market shaken by the post-pandemic economic recovery and the Russian invasion of Ukraine. A year on, prices have fallen back, albeit to high levels, and the oil and gas giants are reporting lower earnings. BP’s compatriot Shell reported a 64% year-on-year fall in second-quarter net profit last week. Despite the decline in earnings, BP announces generous shareholder distributions, with an increased dividend and a $1.5 billion share buyback program.
“This reflects confidence in our performance and prospects,” assured CEO Bernard Looney, quoted in the release.
For the third quarter, BP expects oil prices to be supported by seasonal demand and OPEC+ (Organization of the Petroleum Exporting Countries and their allies) production restrictions. BP announced last February that it was slowing down the pace of its energy transition, indicating that it intended to boost profits by 2030 by investing more in both renewables and hydrocarbons, drawing the ire of environmentalists.
