Oil major BP beats profit expectations as Iran war boosts fuel prices

British energy major BP on Tuesday reported stronger-than-expected first-quarter profit, following a surge in oil and gas prices driven by the Middle East conflict.

The oil giant posted underlying replacement cost profit, used as a proxy for net profit, of $3.2 billion for the first three months of the year. That beat analyst expectations of $2.63 billion, according to an LSEG-compiled consensus.

The company said the results reflect “exceptional” oil trading contributions and stronger midstream performance.

BP’s net profit came in at $1.38 billion over the same period last year and $1.54 billion in the final three months of 2025.

“Overall, our business continues to run well. This was another quarter of strong operational and financial delivery, and we made further progress towards our 2027 targets,” BP CEO Meg O’Neill said in a statement.

BP’s earnings come as oil and gas companies experience a significant share price boost, with fossil fuel prices soaring since the U.S.-Israeli war against Iran started on Feb. 28.

Ongoing and severe disruption through the strategically vital Strait of Hormuz has resulted in what the International Energy Agency has described as the biggest energy security threat in history.

Shares of BP have rebounded over the last 12 months, following years of relative underperformance that culminated in the company becoming the subject of intense takeover speculation.

The London-listed stock has continued to rally this year. Shares are up more than 32% in 2026, which means BP is second-only to France’s TotalEnergies among the top five oil supermajors.

BP’s net debt came in at $25.3 billion at the end of the first quarter, up from $22.18 billion at the end of last year. The company is aiming to bring its net debt down to between $14 billion and $18 billion by the end of next year.

Looking ahead, BP said it expects reported upstream production to be lower when compared to the first three months of the year, citing seasonal maintenance and Middle East disruptions.

The company reaffirmed its 2026 capital expenditure guidance at $13 billion to $13.5 billion and said it expects divestment and other proceeds to be at $9 billion to $10 billion through the year.

BP’s board suffered a shareholder revolt at its annual general meeting last week following a tense clash with investors over corporate governance and climate transparency.

The company failed to get majority shareholder approval on two highly anticipated motions, which would have permitted online-only AGMs and retired two company-specific climate disclosure obligations.

It formed part of a broader investor rebellion at the AGM, one that resulted in weaker-than-typical support for BP Chair Albert Manifold and robust backing for a motion calling on the energy major to justify its capital discipline on oil and gas investments.