By Adria Calatayud
BP said it expects an exceptional oil-trading result for the first quarter, with the war in the Middle East fueling market volatility.
Large-scale disruption to oil and natural-gas production and shipping because of the war in Iran jolted energy markets in recent weeks, rocketing crude prices above $100 a barrel and lifting energy stocks. But some of the industry's biggest projects have been targeted during the war, prompting the companies behind them to warn that the conflict could cost them billions of dollars in lost revenue.
BP on Tuesday joined peer Shell in forecasting a boost from oil trading for the first quarter, but also cautioned that volatility would cloud its results and lead to an increase in net debt. Exxon Mobil last week warned of a hit to first-quarter earnings to the tune of $3.5 billion to $4.9 billion from timing effects associated with its trading program.
he shock caused by the war in Iran and the blockade of the Strait of Hormuz sent oil benchmarks to levels last seen after Russia's full-scale invasion of Ukraine in 2022.
For BP, the quarterly update ahead of full results later this month marks the first time it has reported on its operations since Meg O'Neill became chief executive officer in early April. O'Neill, an American executive who joined from Woodside Energy, took the reins after years of management upheaval at BP and investor frustration with the company's performance.
Shares in BP have jumped more than a third in 2026 to date amid a rally in oil stocks, and were down slightly in European morning trade.
The company said its expectation of an exceptional oil-trading result would contrast with a weak fourth-quarter performance. BP said it expected its gas marketing and trading result to be average, in line with the fourth quarter.
BP said the price environment would result in a significant working-capital build of between $4 billion and $7 billion, resulting in an increase in net debt to between $25 billion and $27 billion at the end of the first quarter compared with $22.2 billion three months prior.
The company said upstream output for the first quarter would be broadly flat compared with the prior quarter, when it produced 2.34 million barrels of oil equivalent a day. Oil production is expected to be slightly lower quarter-on-quarter, while the output from the company's gas and low carbon energy operations is expected to edge higher.
BP said heightened volatility in crude oil, gas and refined products prices toward the end of the first quarter would affect its results and noted dislocations between marker prices and those realized by the company. Market conditions are also expected to increase the impact of price lags, the company said.
Write to Adria Calatayud at adria.calatayud@wsj.com
(END) Dow Jones Newswires
04-14-26 0453ET
