BP is the latest oil major to report bumper profits as energy prices have soared

London (AFP) - British oil giant BP rebounded to second-quarter profit on soaring energy prices, it said Tuesday, after a big loss linked to its Russia exit following Moscow’s invasion of Ukraine.

Net profit hit $9.3 billion in the three months to June – a threefold increase from the same period last year, the company said in a results statement.

And it contrasted sharply with a $20.4-billion loss after tax in the first quarter, when it took a vast writedown after its decision to leave Russia.

BP is the latest energy major to post bumper second-quarter earnings as oil and gas prices have surged in the wake of key producer Russia’s invasion of Ukraine.

Prices also spiked after countries lifted Covid pandemic lockdowns, spurring global energy demand.

British rival Shell revealed last week a fivefold surge in net profit to $18 billion while France’s TotalEnergies raked in nearly $6 billion.

US majors ExxonMobil and Chevron last week logged record profits for the same period.

Turning to the third-quarter outlook, BP forecast Tuesday that oil prices will “remain elevated … due to ongoing disruption to Russian supply, reduced levels of spare capacity and with inventory levels significantly below the five-year average”.

It warned gas prices will also remain “elevated and volatile” as Russia also squeezes European supplies in retaliation for Western sanctions over the assault on Ukraine.

The gas outlook was “heavily dependent on Russian pipeline flows or other supply disruptions”, BP added.

The group’s share price jumped about four percent in London trade, as investors welcomed news of a dividend hike and a $3.5-billion stock buyback.

Revenues were catapulted 86 percent to almost $68 billion from a year earlier.

- Windfall tax pleas -

At the same time, BP posted a net loss of $11.1 billion for the first half of 2022.

That was sparked by a colossal first-quarter charge of $24.4 billion, linked to a decision to exit its 19.75-percent stake in Russian energy group Rosneft as well as its other activities in the country.

That wiped out the overall benefit of high energy prices in the first half.

Gas prices, which skyrocketed in March after Russia launched its invasion of neighbouring Ukraine, surged last week after Moscow curbed crucial deliveries to Europe.

The market remains at its highest level since March after state-run Gazprom suspended gas deliveries to Latvia on Saturday.

Back in Britain, the government in May proposed a temporary windfall tax on BP and its UK rivals including Shell to help ease a cost-of-living crisis.

The proceeds will help to fund a multi-billion-pound support package for consumers hit by surging domestic electricity and gas bills.

UK annual inflation hit a new 40-year high of 9.4 percent in June.

Rocketing Chevron and ExxonMobil earnings also prompted calls for a windfall profits tax on the sector in the United States, which faces the highest inflation in four decades as well.

A similar plea was made by left-wing politicians in France after TotalEnergies published its second-quarter earnings, but President Emmanuel Macron’s government has opposed such a move.

Britain-based campaigners slammed BP on Tuesday over its latest results.

“While households are being plunged into poverty with knock-on-impacts for the whole economy, fossil fuel companies are laughing all the way to the bank,” said Doug Parr, chief scientist at green campaign group Greenpeace UK.