BP Sees Further Oil-Trading Gains as Iran Conflict Fuels Volatility — Update

By Adria Calatayud

BP said it expects further gains from oil trading but lower upstream production in the second quarter than in the first, as the U.K. energy major continues to navigate turmoil in energy markets due to the Iran conflict.

The company said Tuesday that it would take a $1 billion hit in the second quarter from write-downs on transition businesses in its gas and low-carbon energy segment. But it forecast a slightly higher oil-trading result in the second quarter compared with the first three months of the year, when it flagged an exceptional performance.

The company also said price lags would lift the results of its oil and gas segments, while seasonal maintenance and Middle East disruptions led to a decline in its quarterly output.

Shares in BP rose 3% in early European morning trading.

The update points to oil-trading gains at BP for the second quarter in a row, just before renewed fighting in the Middle East caused a fresh bout of volatility in energy markets.

BP follows rival Shell in predicting a boost from trading and a hit from production volumes lost because of the conflict, which has disrupted the operations of some of the world's largest suppliers of oil and gas and triggered big price swings.

The conflict in Iran means BP's recently appointed chief executive officer, Meg O'Neill, is steering the company through upheaval both in global energy markets and internally, with the abrupt removal of Albert Manifold as chairman in May having brought more turmoil after repeated leadership changes and strategic uncertainty in recent years.

BP's results at the start of the year already benefited from what the company called an exceptional oil-trading performance, as the outbreak of war in Iran drove a surge in energy prices and helped its traders as customers scrambled to secure supplies of jet fuel and diesel.

A ceasefire agreement between the U.S. and Iran later weighed on Brent crude futures, the international oil benchmark. Brent futures just notched their worst quarterly percentage fall since the Covid-19 pandemic, with a 38% drop in the second quarter, but they clawed back some of those declines when fighting flared up again.

The latest fire exchanges over the weekend and President Trump's announcement that he was reimposing the U.S. blockade on Iranian shipping through the Strait of Hormuz sent Brent crude futures up 9.6% to settle at $83.30 a barrel on Monday, marking their largest daily percentage gain since May 2020, when prices were recovering from the Covid-19 lockdown slump.

BP said it expects price lags for its output in the Gulf of Mexico--which the U.S. now calls the Gulf of America--and the United Arab Emirates to contribute to gains of between $1.8 billion and $2.1 billion in the second-quarter results of its oil production and operations segment.

The company said it expects quarterly reported upstream production to range from 2.17 million to 2.22 million barrels of oil equivalent a day compared with 2.34 million barrels of oil equivalent a day in the first quarter. It attributed the decline to seasonal maintenance, predominantly in the Gulf of Mexico, as well as to the effects of disruption in the Middle East.

BP, which is seeking to cut costs and sell assets to reduce its debt load, forecast net debt at the end of the second quarter to range from $22 billion to $23 billion, down from $25.3 billion at the end of March.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

July 14, 2026 03:54 ET (07:54 GMT)