BP Forecasts Oil Trading Gains Amid $1 Billion Charge

BP issued a second-quarter trading update forecasting a boost in earnings driven by stronger oil realizations and refining margins. While oil trading profits are expected to increase compared to the first quarter, the company is bracing for a $1 billion post-tax impairment charge related to its transition businesses as it pivots back toward core oil and gas operations. Additionally, the company anticipates $500 million in exploration write-offs following the sale of the Bay du Nord project in Canada.

Upstream production is projected to fall to between 2.17 million and 2.22 million barrels of oil equivalent per day, down from approximately 2.34 million in the first quarter. BP attributed this decline to seasonal maintenance in the Gulf of America and supply disruptions in the Middle East. Specifically, hostilities between the United States and Iran led to the closure of the Strait of Hormuz, causing energy costs to spike and increasing market volatility.

Financially, the company forecasts net debt will decrease to between $22 billion and $23 billion by the end of the quarter. This projection accounts for the redemption of €2.5 billion in hybrid bonds and a $1.1 billion settlement payment in the Gulf of America. These updates follow internal leadership changes, including the April appointment of chief executive Meg O’Neill and the removal of former chairman Albert Manifold over governance and conduct concerns.