BP Q1 2026 profit jumps 130% to $3.2bn on Iran war

What BP reported for the March quarter

BP said its preferred profit measure, underlying replacement cost profit, rose to $1.2bn in the first quarter of 2026. The company said that result was up more than 130% and beat analyst expectations of $1.67bn. BP also compared the figure with $1.54bn in the previous quarter and $1.38bn a year earlier. Another profit line cited in the coverage, profit after tax, increased to $1.8bn for January to March from $1.687bn a year earlier. BP also reported earnings of $1.47 per share for the quarter. Stripping out one-time gains, earnings were $1.24 per share, above the 91 cents per share expected by analysts polled by Zacks Investment Research.

Iran war and the Strait of Hormuz supply shock

Oil prices climbed sharply after the US and Israel launched a war in Iran on February 28. The Strait of Hormuz, a critical route between Iran and the United Arab Emirates, was described as being almost entirely closed. More than a fifth of the world’s oil would typically move through the waterway, and it was also described as usually carrying about 20% of global supplies of oil and liquid natural gas. The disruption tightened energy supply conditions and contributed to large price swings. Those price moves became a central driver of the quarterly outcome reported by BP and other European oil majors.

Oil prices: from mid-$10s to above $100

Brent crude, the global benchmark, reached close to $120 a barrel at one stage during the war. As of Tuesday, it was around $110 a barrel, its highest level since an agreed US-Iran ceasefire began on April 7. Another datapoint in the reports said Brent North Sea crude averaged $11.13 a barrel in the first quarter, up from $13.73 in the fourth quarter of last year. The coverage also described oil prices as rising from the mid-$10s range in February to over $100 later in the conflict period. Oil prices were described as more than 60% higher so far this year, underscoring the scale of the move.

Trading strength led the quarter

BP said the Iran war and resulting volatility boosted oil trading results. The company had already flagged an exceptionally strong quarter for its trading desk. Its customers and products business, which includes the trading business, recorded profit of $1.2bn before interest and tax. That compared with an average analyst estimate of $1.5bn for the segment. In contrast, results at BP’s gas and low carbon and oil production and operations units came in slightly below expectations, according to the report.

Balance sheet: net debt rose, working capital moved sharply

BP said net debt at the end of the first quarter was $15.3bn, up from just over $12bn in the previous quarter. It linked the increase to “working capital movements” that totalled $1bn in the quarter, described as being boosted by the impacts of the Iran war. Working capital was described as a liquidity measure of current assets minus liabilities. The update also said fuel margins are expected to “remain sensitive” to the cost of supply and conditions in the Middle East. BP added it expects 2026 reported upstream production to be lower due to the effects of the conflict.

What management and critics said

CEO Meg O’Neill said the quarter reflected “strong operational and financial delivery” and that BP made further progress towards its 2027 targets. Separately, Simon Francis, coordinator of the End Fuel Poverty Coalition, criticised the scale of profits against the backdrop of rising household costs. He said the results were a reminder that when conflict drives up oil and gas prices, energy companies profit while households pay. The reports also noted that fuel prices rose around the world during the period, and that UK energy bills are set to rise when the price cap is next updated on July 1.

Market reaction and share performance

BP’s shares rose more than 2% before the market open on Tuesday in one report, while another report put the early move at about 2.5%. The coverage also said BP shares were up 32% since the beginning of the year and up 57% over the past year. Another datapoint cited a surge of more than 28% in the past three months alone. The broader framing was that investors were tracking the higher oil price environment and the resulting earnings strength for the sector.

Key numbers at a glance

Why the quarter matters

The result showed how trading performance can swing sharply when markets become volatile, particularly during supply disruptions tied to geopolitics. BP explicitly linked the quarter’s strength to an “exceptional” oil trading contribution, while also pointing to sensitivity in fuel margins and operational effects on upstream production expectations for 2026. The quarter also highlighted the balance-sheet impact of price and inventory dynamics, with BP flagging a $1bn working capital movement and higher net debt. In a separate disclosure cited in the reports, BP said each $1 variation in the price of a barrel has a $1.34bn impact on its annual operating profit before tax.

Conclusion

BP’s first-quarter 2026 profit beat expectations as the Iran war lifted crude prices and created volatile trading conditions that supported its customers and products business. Management pointed to progress towards 2027 targets, while campaigners focused on the impact of higher energy costs on households. Investors will be watching BP’s commentary on fuel margin sensitivity, the outlook for 2026 upstream production, and how net debt trends after the quarter’s $1bn working capital movement.