British energy giant, BP plc (NYSE: BP) plummets over 5.47% to trade at $37.82 in pre trading session on Tuesday as the company reported a high quarterly profit, despite the fact that oil and natural-gas prices have fallen since Russia’s war in Ukraine last year.
BP, headquartered in London, reported a $5 billion underlying replacement cost profit in the first three months of the year, up from $4.8 billion the previous quarter. The number eliminates one-time products and inventory value variations.
The financial report, according to the business, “reflects exceptional gas marketing and trading result” as well as a “very strong oil trading result.”
CEO Bernard Looney said in a statement that this has been a quarter of strong performance and strategic delivery.
Following Russia’s invasion of Ukraine in February 2022, which sent energy prices soaring and curtailed some of Moscow’s supplies to the world, oil companies around the world have reported record profits.
The high earnings and consequent high compensation for energy company executives have fueled calls for the firms to do more to safeguard consumers who are being squeezed by rising energy prices, which have driven inflation climbing.
The current profit figures were lower than the $6.2 billion reported by BP in the first quarter of 2022, but they still above expert estimates, despite the fact that oil and gas prices had fallen since peaking in the first half of last year.
The earnings announcement revived a discussion in the United Kingdom about raising taxes on corporations benefiting from high energy costs due to Russia’s conflict. BP’s revenues are “over and above” what the business planned, according to British opposition leader Keir Starmer, and should contribute to a “proper windfall tax.”
BP predicted that oil demand will “remain elevated” in the second quarter due to a recent agreement by several OPEC+ states to limit output, paired with stronger Chinese consumption.
The corporation has also lately come under fire for softening its climate ambitions, cutting its aims for reducing greenhouse gas emissions by a third while aiming to pump more oil and gas by the end of the decade than originally predicted.
BP also announced further measures to reward shareholders, including a $1.75 billion stock buyback, but this was less than the $2.75 billion repurchase planned in the previous quarter.
