BP has reported an 'exceptional' oil trading performance in the first quarter of 2026, driven by surging crude prices following the outbreak of the US-Israel war on Iran in late February. The energy giant upgraded its guidance for the period, marking a significant turnaround from a 'weak' fourth-quarter performance in 2025.
Market Volatility and Financial Impact
The conflict in the Middle East has created heightened volatility in crude oil, natural gas, and refined products prices, according to BP. This volatility is expected to impact financial results, including trading outcomes and working capital movements. The company noted the effect of 'price lags,' where realized prices may not immediately reflect benchmark gains in certain regions.
Price Surge and Financial Metrics
Brent crude prices have risen more than 60% since the start of the year, reaching close to $120 per barrel at one point and currently hovering around $100. The average Brent price in the first quarter was $81.13 per barrel, up from $63.73 in the fourth quarter of 2025. Refining margins also improved, contributing an additional $100 million to $200 million to BP's refined products business.
Debt and Production
BP expects its net debt to rise to between $25 billion and $27 billion, up from $22.2 billion in the previous quarter, due to increased working capital requirements amid volatile market conditions. Oil and gas production remained broadly flat, while gas trading results were described as 'average' due to price lags. Customer-facing businesses are expected to see seasonally lower volumes and softer retail margins, though this is partly offset by stronger midstream activity.
Broader Industry Trends
The update reflects a broader trend across the energy sector, where heightened volatility is benefiting trading arms and refining margins. Rival Shell also reported a significant boost to its trading business from the war, though it slashed its gas production for the first quarter due to the conflict.