BP has announced that weak refining margins and a slowdown in global fuel demand are expected to reduce its third-quarter profit by up to $600 million. Key highlights include:
The refining sector is experiencing a significant drop in profitability, reaching multi-year lows, reversing the post-pandemic surge in returns.
BP’s second-quarter profit was reported at $2.756 billion, but the outlook for Q3 is concerning due to a 17% decline in oil prices, the largest quarterly drop in a year.
Competitors like Shell and ExxonMobil have also warned about declining refining margins and weak oil trading results.
BP’s CEO, Murray Auchincloss, is attempting to regain investor confidence by scaling back the firm’s energy transition strategy, as the company’s stock has underperformed relative to its rivals.
The company anticipates higher net debt at the end of the quarter, largely due to weaker refining margins.
BP’s upstream production is expected to remain stable, with total hydrocarbons production at 899,000 barrels of oil equivalent per day.