BP posts record underlying profit of $8.46 billion in third quarter
Key Facts
BP posted underlying replacement cost profit of $8.46 billion in the third quarter of 2026, beating the average analyst forecast of $7.33 billion, according to Reuters. Profit rose from $2.2 billion in the same period of 2025, driven by higher refining margins and realised prices, and improved trading results. Chief Executive Meg O’Neill said the strong results were supported by a backdrop of “higher prices and margins” and progress in improving performance across the business. The surge coincided with the company strengthening its cash flow and reducing net debt. But underlying profit is not the same as accounting profit attributable to shareholders, and the company also recorded significant impairment charges during the quarter.
Operating cash flow reached $14.829 billion in the third quarter, while net debt stood at $13.870 billion at the end of the period, compared with $22.251 billion at the end of the second quarter. Reuters said the company achieved its net debt target a year ahead of schedule, benefiting from strong cash flow. The quarterly decline means BP cut net debt by more than $8 billion over three months, according to the reported figures. However, the company still has liabilities related to the Deepwater Horizon spill, with amounts payable and provisions for it totalling $5.94 billion. BP said it would prioritise using surplus cash flow to settle all remaining liabilities.
Improved refining was a prominent factor in performance: BP’s refining margin indicator rose to $46.7 per barrel in the third quarter, compared with $29.6 in the second quarter and $15.8 a year earlier. Underlying profit before interest and tax in the customers and products segment was $6.95 billion, against $5 billion in the previous quarter. The company said higher underlying profit mainly reflected increased realised refining margins and realised prices, alongside a much larger contribution from oil trading and a better result from gas marketing and trading. The quarter-on-quarter comparison shows the customers and products segment’s contribution to profit widening alongside the rise in the refining indicator. O’Neill also said improved performance across the business helped support results.
The strong profit came alongside pre-tax impairment charges of $4.07 billion. The charges included $3.37 billion in the gas and low-carbon energy segment and were mainly related to transition businesses, including Lightsource bp and offshore wind. The charges highlight the difference between underlying profit, which beat expectations, and the accounting result, which was affected by asset write-downs. The impairments did not cancel out the operational improvement reflected in refining margins and trading, but remained a significant item in the quarter’s accounts. The company therefore faced a quarter combining high cash flow and debt reduction on one hand with large asset charges on the other.
BP shares rose 1.2% in early trading on October 30, outperforming a 0.1% gain in a broader index of European energy companies, according to Reuters. EL7 data showed the shares closed at 50.35 on October 29, the session before the results were announced. That early move places the shares’ performance in the context of the market’s response to the results, with the stock outperforming the sector index in that trading. The available facts did not include the share’s closing price on the day of the announcement. The session’s performance is therefore limited to the early gain reported by Reuters.
BP expects a much lower result from its customers business in the fourth quarter than in the third, due to a seasonal decline in volumes, a weaker result from midstream activities and lower Castrol earnings, taking into account the expected completion of the divestment. This forecast curbs expectations that the segment’s level of contribution in the third quarter will continue into the next period. On distributions, the company announced an interim dividend of 8.660 cents per ordinary share, expected to be paid on December 18, 2026, to shareholders on the register on November 13. BP also plans to hold a strategy and outlook update in New York on December 15, 2026. That will follow a quarter in which cash flow supported debt reduction, while liabilities related to the Deepwater Horizon spill and impairment charges remained part of the company’s financial picture.