𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

BP has said it expects a further boost to oil trading in its second quarter due to the soaring cost of crude, but flagged a write-down of around £1 billion dollars (£740 million) and expects production to fall amid the Middle East conflict.

The FTSE 100 giant said its oil trading result is set to be “slightly higher” than the first quarter, when the wider customers and products division saw profits surge to 2.5 billion US dollars (£1.87 billion).

This compared with 1.4 billion dollars (£1.04 billion) in the previous quarter and 103 million dollars (£77.1 million) a year ago.

But BP said it is bracing for an impairment charge of 1 billion dollars (£740 million) from “transition businesses” as it continues to shift back towards core oil and gas.

The write-down, which will be excluded from its underlying replacement cost profit for the April to June quarter, follows a similar charge of 5 billion dollars (£3.74 billion) in the fourth quarter of 2025 on the so-called transitions businesses in the gas and low carbon energy unit.

Its update ahead of second quarter results on August 4 also showed BP expects upstream production to fall to between 2.17 million and 2.22 million barrels of oil equivalent per day from 2.34 million in the first quarter, which it said reflects seasonal maintenance and “the effects of disruption in the Middle East”.

Shares in BP rose 3% as the mixed update was offset by a renewed surge in oil prices given the flare-up in hostilities between the US and Iran.

Brent crude was another 4% higher in morning trading on Tuesday at more than 86 dollars (£64) a barrel.

Oil prices had returned to pre-war levels in June after an interim peace deal was signed by the US and Iran, with the countries declaring the Strait of Hormuz to be reopened.

But the strait – through which a fifth of the world’s oil and gas is normally carried – continues to be a key issue in fraught peace-deal negotiations between the US and Iran and its closure once more has sent energy costs spiking higher.

BP’s results next month come at a tumultuous time for the group after the removal of former chairman Albert Manifold following “serious concerns” related to his conduct, oversight and governance at the firm.

In response, Mr Manifold rejected “lies” about his conduct and said his views on cost-cutting and calling out “excessive expenditure” were not shared by others at the firm.

Meg O’Neill, who took over as chief executive in April, is under pressure to help drive a turnaround at BP after replacing previous boss Murray Auchincloss.