BP's profits rose sharply in the first quarter, reaching $3.2 billion on an adjusted basis, above analysts' forecasts of $2.7 billion and more than double the $1.38 billion earned in the same period a year earlier. This is the first quarter since Meg O’Neill became BP's CEO, and it also reflects exceptionally strong performance from the trading division, which capitalized on the volatility in oil prices amid the Gulf conflict. The base earnings from the refining and trading segment rose to $2.2 billion in the first three months, up from $469 million a year earlier. Traders often benefit from price swings as larger gaps between buyers and sellers create more opportunities for profitable trading activities and for customers such as utilities and airlines to hedge risk. The higher trading profits also helped reduce BP's effective tax rate from 43% to 32% in Q1. BP’s stock rose 0.8% on April 28, extending its gains since the U.S. and Israel began operations against Iran in late February to around 20%. Brent crude rose from below $60 a barrel at the start of the year to as high as $119 in March when Iran closed the Hormuz Strait and attacked energy facilities across the Gulf. After a pullback, Brent traded above $111 on April 28 as there seemed to be little progress toward a peace deal. CEO O’Neill said BP has been working hard to maintain production and help nations secure
fuel as needed, minimizing disruptions from the conflict. BP also said it is monitoring the impact of the conflict on its production sites in Abu Dhabi, Oman and Iraq, where the company produces about 309,000 barrels per day, accounting for about 17% of BP's total output. BP, which is listed on the London Stock Exchange, said it expects oil and gas output for the full year to be lower due to the conflict, but did not provide specifics. BP's net debt rose by $3.1 billion to $25.3 billion in Q1 as operating cash flow fell and variable operating costs rose 46% to $7.2 billion. BP said it remains committed to reducing net debt to $14-18 billion by 2027.
