British oil giant BP rebounded to second-quarter gains on rising energy prices, it said Tuesday after suffering a big loss related to its exit from Russia following Moscow’s invasion of Ukraine.
Net income for the three months ended June reached $9.3 billion — tripling from the same period last year, the company said in a earnings statement.
That was in sharp contrast to a $20.4 billion loss in the first quarter, when a huge write-down was taken following his decision to leave Russia.
BP is the latest energy giant to post record second-quarter profits as oil and gas prices soared amid key producer Russia’s invasion of Ukraine.
Prices have also skyrocketed after countries lifted Covid pandemic lockdowns, boosting global energy demand.
British rival Shell last week announced a five-fold increase in net profit to $18 billion, while France’s TotalEnergies brought in nearly $6 billion.
US majors ExxonMobil and Chevron posted record earnings for the same period last week.
Regarding its third-quarter outlook, BP forecast on Tuesday that oil prices “will remain elevated due to continued Russian supply disruption, reduced spare capacity and inventories well below the five-year average.”
And it warned that gas prices will also remain “elevated and volatile” as Russia also squeezes European supplies in retaliation for Western sanctions over the attack on Ukraine.
The gas outlook is “heavily dependent on Russian pipeline flows or other supply disruptions,” BP added.
– Windfall Tax Claims –
At the same time, BP reported a net loss of $11.1 billion for the first half of 2022.
This was prompted by a whopping $24.4 billion strain associated with a decision to divest its 19.75 percent stake in Russian energy group Rosneft.
This wiped out the overall benefit of high energy prices in the first half of the year.
Gas prices, which had skyrocketed in March after Russia launched its invasion of neighboring Ukraine, rose sharply last week after Moscow cut key supplies to Europe.
The market remains at its highest level since March after state-owned Gazprom suspended gas supplies to Latvia on Saturday.
Back in the UK in May, the government proposed a temporary windfall tax for BP and its UK competitors, including Shell, to ease a cost of living crisis.
The proceeds will help fund a multi-billion pound support package for consumers hit by rising household electricity and gas bills.
Annual inflation in the UK hit a new 40-year high of 9.4 percent in June as rising fuel and food prices further squeezed workers’ wages.
Soaring profits from Chevron and ExxonMobil also led to calls for a windfall profits tax for the sector in the United States, which is also facing the highest consumer price inflation in four decades.
A similar appeal was made by left-wing politicians in France after TotalEnergies released its second-quarter results, but President Emmanuel Macron’s government has resisted such a move.
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