BP profits double as Iran conflict sends oil prices soaring

BP has reported its highest quarterly profits since the first year of Russia's war on Ukraine, as escalating conflict in the Middle East sent energy prices soaring. The British oil giant earned $5.73bn in the three months to the end of June, more than double the previous quarter's figure, while new chief executive Meg O'Neill signalled that a major overhaul of the company, including a possible exit from the North Sea, is on the horizon.

Profits soar amid Middle East turmoil

The surge in earnings was driven by rising oil and gas prices following disruptions to exports from the Gulf region. BP's profits jumped by roughly $2.5bn from the previous quarter, underscoring how geopolitical tensions continue to reshape energy markets. The results echo those of European rival Shell, which posted its second-highest quarterly earnings on record, with net profits doubling to almost $10bn in the same period. Saudi oil giant Aramco also saw a 44% rise in net profits, reaching $32.69bn, despite disruptions in the Strait of Hormuz, thanks to higher sales revenue for crude, refined and chemical products.

New CEO promises overhaul

Meg O'Neill, who recently took the helm of the 117-year-old company, said there was “more to do” because BP was “not making the most” of its potential. She is widely expected to undertake a sweeping restructuring, which may include ending six decades of production in the UK North Sea. O'Neill defended the continued use of domestic oil and gas, telling CNBC that Britain still consumes vast amounts of these resources daily and should prioritise its own supplies over imports from third parties. She also expressed optimism about the new prime minister's approach, saying he had “reinforced his desire to work closely with business” and focus on practical, community-level economic benefits. However, the apparent support for renewed drilling has already sparked warnings of a potential backlash within the prime minister's own party.

Political tensions over North Sea future

The prospect of BP exiting the North Sea has stirred political debate about energy security and the transition to net-zero emissions. While some argue domestic production is essential to avoid dependence on foreign energy, environmental groups and many lawmakers are pushing for a faster shift away from fossil fuels. The new government's stance on drilling could become an early flashpoint, with reports of possible revolt from within its ranks if it appears too supportive of fossil fuel interests.

Criticism over windfall profits

The bumper earnings have drawn sharp criticism as households and businesses struggle with high energy bills and Europe grapples with severe heatwaves exacerbated by climate change. Friends of the Earth campaign chief Rosie Downes said: “Clearly not everyone is feeling the pain of the energy crisis. While BP banks another round of enormous profits, millions of households are paying the price through sky-high energy bills and a climate crisis accelerating rapidly out of control with increasingly severe heatwaves, wildfires and droughts.” The political mood is also shifting in the United States, where former President Donald Trump has said that Chevron and ExxonMobil, which also reported sharp profit increases this week, are “making too much money” and should return some profits to the public.

What next for BP?

O'Neill's leadership comes at a critical crossroads for BP. The company must balance lucrative fossil fuel revenues with growing pressure to invest in clean energy. Her promised overhaul is likely to reshape the company's strategy, focusing on areas where it can generate the strongest returns while addressing long-term sustainability concerns. With oil prices likely to remain volatile due to geopolitical instability and the accelerating energy transition, BP faces tough decisions about where to invest and how to navigate a rapidly changing global landscape. Investors and policymakers will be watching closely to see whether O'Neill can deliver the transformation she has hinted at, and whether her approach to domestic energy production aligns with the new government's goals.