BP reported on Tuesday financial results for the first quarter that indicated the company's net profit plunged sharply compared to the same period a year earlier as the struggling energy giant undergoes a major overhaul back to its fossil fuel business.
Profit after tax declined around 70% to $687 million, down from $2.3 billion in the first three months of 2025, driven by weaker gas sales and lower refining margins, BP said in a statement.
The underlying replacement cost profit, used as a proxy for net profit, came in at $1.38 billion for the first three months of the year, below the $1.53 billion expected by analysts in a company-provided poll. That was down from $2.7 billion a year earlier.
Total revenue fell 4% to slightly under $48 billion.
BP and other oil majors have been hit by a recent slump in crude prices on fears that U.S. President Donald Trump's tariffs could cause a recession, impacting demand.
Global benchmark Brent crude prices averaged around $75 a barrel during the January-March quarter, compared with around $87 a year earlier.
"We continue to monitor market volatility and changes and remain focused on moving at pace," CEO Murray Auchincloss said in an earnings statement.
Auchincloss is under pressure from activist investor Elliott to improve profitability and cut costs. He has announced plans to sell $20 billion of assets through 2027.
Under pressure from investors, BP is in the middle of a major reset that saw it shelve its once industry-leading carbon-reduction targets to focus on fossil fuel output deemed more profitable.
The recent retreat in oil prices has cast doubt over this, however, according to analysts.
The company also announced on Tuesday that the head of sustainability strategy, Giulia Chierchi, will step down from her role in June and will not be replaced.
U.S. fund manager Elliott Investment Management had wanted a change of strategy chief as it seeks higher free cash flow through deeper cuts to spending and costs, sources familiar with the matter told Reuters.
BP's shares have lagged peers since its foray into renewables under previous CEO Bernard Looney, who brought Chierchia into BP. They were down more than 4% after Tuesday's profit miss, compared with a 1% fall in a wider index of energy companies
The company on Tuesday also reduced its quarterly share buyback to $750 million, at the lower end of expectations.
Auchincloss said he remains "confident" in the reset, adding that BP has "already made significant progress."
To the dismay of environmentalists, the new strategy includes cutting cleaner energy investment by more than $5 billion annually.
The strategy overhaul followed a difficult trading year for BP, which is under pressure from investors to boost its share price as countries look to slash emissions.
The company confirmed last week that Elliott Investment Management has taken a stake of just over 5% in BP.
The fund is known for forcing through corporate changes within groups it invests in, according to analysts.
BP at the start of April said Chairperson Helge Lund, who assumed the role in 2019, would depart the company next year.
"Geopolitics and trade tensions are more complex today than for a long time. This uncertainty has had an impact on BP," Lund told shareholders at the company's annual general meeting in April.
The Norwegian national worked with three CEOs at BP, which included helping guide the company through the turbulent COVID-19 pandemic when energy demand collapsed.
"BP's making the best it can of a sticky situation," said Derren Nathan, head of equity research at Hargreaves Lansdown.
The group is ramping up its global exploration program, with around 40 wells planned over the next three years, including as many as 15 to be drilled this year.
It recently announced it had made a new oil discovery off the U.S. Gulf coast.
"But going into the second quarter, weaker oil prices mean management will be under more pressure than ever to meet the expectations of its biggest shareholder," Nathan added.
