oil major blood pressure Friday’s third-quarter forecast was well below expectations as volatile energy markets and high refining margins pushed profits nearly four times higher than a year ago.
As a proxy for net income, the company reported an underlying replacement cost benefit of $8.5 billion. This exceeded analysts’ consensus estimates of $6.191 billion and was up from $2.2 billion in the same period last year.
Operating cash flow reached $28.55 billion in the first nine months of this year, up from $16.89 billion in 2025, while net debt fell to $13.87 billion from $26.05 billion in the same period.
BP said the results primarily reflected improved performance in gas and marketing transactions and a “significant increase” in realized refining margins.
“These are dynamic times, with volatility defining energy markets and disruption to trade flows,” BP Chief Executive Meg O’Neill said in a statement.
“The industry as a whole has shown remarkable adaptability. Refineries are operating close to capacity to make up for shortfalls, transportation is taking alternative longer routes, and releases from strategic and commercial reserves are helping to fill supply gaps.”
Demand outlook
rival shell and total energy The company said Thursday that refining margins from processing crude oil into products such as diesel, jet fuel and gasoline have reached historic highs.
Global fuel markets have tightened this year due to refinery outages and damage caused by global conflicts, from the Russia-Ukraine war to the Middle East, pushing product prices significantly higher than crude oil.
Benchmark oil prices have also fluctuated wildly this year as traders quickly reacted to unpredictable news flows from the U.S.-Israel war on Iran, and remain nearly double the level they were a year ago.
ICE Brent crude oil price.
Analysts are wondering when and if higher energy prices will eventually cause demand destruction and ease pressure on constrained refineries, as premiums for refined products over crude oil remain at 10-year highs.
BP CEO O’Neill told CNBC’s “Squawk Box Europe” on Friday that BP’s quarterly refining index margin of $46.7 per barrel was “incredibly strong” and “demonstrates the demand for the products we produce,” driven by refining reliability of more than 96%.
“We have been able to adapt and try to adjust our refining operations to meet the needs of our most in-demand products,” she said.
“If we bring it forward now, you’ll see that refining margins are starting to soften a little bit. The third quarter is always a big operating period, and it’s also a big holiday period. So we typically see lower demand in the fourth quarter. That’s driving refining margins down a little bit.”
“But again, what we do control is our ability to operate our facilities safely and reliably and to try to capture the opportunities that present themselves.”
Last year, BP announced a new strategy to pivot away from renewable energy and toward traditional oil and gas operations. It also announced strengthening of the leadership system and debt reduction.
O’Neill told CNBC on Friday that BP is focused on strengthening its balance sheet to give shareholders “confidence that they will be rewarded through the cycle.”
“So oil prices are high today. They won’t always be high. I’ve been in this industry for 30 years, and prices go up and down. And at some point, they’re going to go down again. So you have to design a company, a financial structure, a balance sheet that can reward shareholders through the cycle.”
That includes addressing financial obligations, including the $5.9 billion it still owes the U.S. government and states in settlements related to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, for which it intends to set aside additional cash, he said.
“Deepwater Horizon was an incredible tragedy that shaped BP. We will never forget the 11 men who lost their lives or the impact we had on the Gulf Coast and its environment,” she said.
“So while we have taken these lessons deeply with us, we are now in a position where we want to comply with our financial obligations going forward to ensure that we are a more resilient company in the future.”
