British energy giant BP more than doubled its profit in the first quarter of the year. Rising oil prices, supply risks around the Strait of Hormuz, and the company's high revenues from oil trading played a key role in this increase.
The editorial office reports that BP's underlying profit for the first quarter rose to $3.2 billion. This figure represents an increase of more than 128 percent compared to the same period last year.
BP's announced results also exceeded analysts' expectations. The company had reported an underlying profit of $1.5 billion in the previous quarter and approximately $1.4 billion in the same period last year.
High profits from oil trading played a special role in the increase in profit. According to Reuters, BP's first-quarter results surpassed expectations thanks to “exceptionally strong” oil trading.
Tensions around the Strait of Hormuz have pushed up prices in energy markets. The Strait of Hormuz is a strategic maritime passage located between Iran and Oman and is considered one of the main routes for transporting oil and liquefied natural gas from the Persian Gulf to global markets.
According to GDH, amid the crisis, the price of Brent crude oil rose to $104, and US crude oil WTI rose to $99. This price increase directly impacted the revenues of major oil companies.
BP stated that overall production remained stable, and the reliability of its facilities reached 95.7 percent. The company announced that increased production in the US Gulf and bpx Energy segments partially compensated for global supply disruptions.
BP's CEO, Meg O'Neill, stated that the company is operating in a period of high uncertainty and increasing geopolitical risks. According to her, in such circumstances, the security of energy supply has become even more critical.
The company also announced a 37 percent reduction in operational emissions compared to 2019. Operational emissions refer to direct carbon emissions generated during the company's own production, processing, and other activities.
BP's results illustrate a scenario where the energy crisis has created significant costs for consumers and importing countries but has opened up additional revenue opportunities for major oil companies. As prices remain high, energy companies' profits will increase, but this will create additional inflationary pressure on the economy through fuel and electricity costs.