BP profits, USA News: Oil giant BP has revealed a near fourfold surge in profits after the Iran war sent prices soaring. Its adjusted profits reached £6.31billion in the three months to September 30, up from £1.65billion a year ago. Chief executive Meg O’Neill said refineries had been running close to capacity to make up for shortfalls caused by the Iran conflict. She stated that the wider industry had shown remarkable adaptability in dealing with the energy shock, adding that she was proud of the contribution BP is making to keep energy flowing.
The results arrive just a day after Shell reported quarterly profits of £8.06billion. The Middle East conflict has caused massive disruption to energy and fuel markets worldwide, with the vital Strait of Hormuz shipping route remaining closed. Oil prices were up two per cent to $117 a barrel as the crisis shows no sign of easing. BP’s latest figures show it has made £13billion in the first nine months of the year so far. Ms O’Neill noted that volatility and disruption to trade flows continue to define energy markets, with refineries running close to capacity, shipping taking longer routes, and releases from strategic and commercial reserves helping to bridge supply gaps.
Deepwater Horizon Liabilities and Asset Sales
The company announced it would use the generated cash to settle its liabilities for the Deepwater Horizon disaster in full. The 2010 explosion at an offshore oil rig killed 11 workers and sent five million barrels of crude into the Gulf of Mexico. To date, the company has spent around £50billion dealing with the fallout, with almost £4.5billion remaining outstanding. Ms O’Neill emphasized that the tragedy changed BP and that safety remains at the heart of their operations.
Earlier this year, BP announced its intention to sell its North Sea operation. Ms O’Neill noted the company is moving at speed to simplify its portfolio to assets that best fit its integrated model and deliver competitive cash returns. Analysts have estimated the North Sea sale could raise £1.5billion and trigger further consolidation. RBC analyst Biraj Borkhataria remarked that BP has continued its streak of beating expectations and demonstrating high leverage to the macro environment.
Criticism from Environmental Campaigners
Environmental groups sharply criticized the higher-than-expected earnings. Jonathan Noronha-Gant from Global Witness labeled the profits obscene, stating that polluters are continuing to cash in on the fallout of the war in Iran while innocent civilians suffer amid rising living costs. Danny Gross, a climate campaigner at Friends of the Earth, called on the Government to make energy affordable by removing hidden taxes on electricity bills and forcing climate offenders to pay for environmental damage.
