British energy giant BP came under fire on Tuesday after revealing profits more than doubled in the first three months of the year thanks to the soaring cost of crude caused by the Iran war.
The oil and gas industry has been in upheaval since the start of the Iran war in February. A back-and-forth tussle over the Strait of Hormuz , the narrow mouth of the Persian Gulf that is critical to global oil shipments, has continued for weeks.
The FTSE 100 firm revealed its preferred profit measure – underlying replacement cost profit – surged by over 130% to a better-than-expected $3.2 billion in the first quarter, up from $1.38 billion a year earlier and $1.54 billion in the previous three months.
Most analysts had expected first-quarter profits of $2.67 billion.
Campaigners accused the group of profiting at the expense of households, who have seen fuel prices rocket at the pumps and are set to see energy bills jump higher when the price cap is next updated on July 1.
"Just as we saw in 2022 following Russia's invasion of Ukraine, fossil fuel giants are quids in when global instability drastically inflates fuel prices, Mike Childs, head of science, policy and research at Friends of the Earth, said.
"But again, it's ordinary people who pay the price when soaring energy prices threaten to plunge the U.K. into an even deeper cost-of-living crisis."
The End Fuel Poverty Coalition called for a windfall tax on firms profiting from the Iran-related energy crisis.
"These astronomical profits are a startling reminder that when conflict drives up the price of oil and gas, energy companies profit and households pay," the campaign group's coordinator Simon Francis said.
BP's new CEO Meg O'Neill, who took over at the helm on April 1, said the group was ensuring fuel supplies are met across the United Kingdom.
"The teams across BP are playing their part to keep oil, gas and refined products flowing during an incredibly challenging time – focused on maintaining safe, reliable and cost-efficient operations," she said.
"We are working with customers and governments to get fuel where it's needed, helping minimize disruption and the impact it can have on people's lives," she added.
Profiteering from 'human misery'
Oil prices have raced higher since the U.S.-Israel war on Iran started on Feb. 28 and are now more than 60% up so far this year.
Brent crude reached close to $120 a barrel at one stage and, despite falling back, is still above the $100 level as peace talks falter and amid fears over a looming global energy supply crisis.
Iran offered to end its chokehold on the strait if the U.S. lifts its blockade on the country and ends the war. But the administration of President Donald Trump seemed unlikely to accept Iran's offer on Tuesday. The White House said Trump's national security team discussed the offer and that Trump would address it later.
BP's update showed its customers and products division – including its oil trading unit – reported profits of $2.5 billion, compared with $1.4 billion in the previous quarter and just $103 million a year ago as traders were able to capitalize on highly volatile oil prices.
The group's shares rose another 3% in Tuesday morning trading, with the stock now having climbed more than a third higher in the past six months amid a boost from the crude rally.
"The oil industry's capacity to profiteer from human misery is almost limitless," Maja Darlington, climate campaigner for Greenpeace UK, said.
"Britain subsidizes this industry to the tune of several billion a year, and yet they'll still claim to be over-taxed," she added.
"Today's numbers make a convincing case that the opposite is true."