BP reported a second-quarter underlying replacement cost profit of $5.7 billion on August 4, 2026, more than doubling its performance from a year earlier.
The numbers are stark. BP’s quarterly profit of $5.7 billion comfortably beat the $5 billion analyst consensus compiled by LSEG. This financial windfall is not an isolated event; it is part of a broader trend where energy supermajors are capitalizing on market volatility. According to CNBC, Exxon Mobil’s second-quarter profits more than doubled to $14.5 billion, while Chevron’s earnings soared by nearly 400% to $12 billion compared to $2.5 billion in the same period last year.
The Strait of Hormuz and the Price at the Pump
The primary driver for these gains is the sprawling Middle East conflict. Hostilities between the U.S. and Iran have severely disrupted shipping through the Strait of Hormuz, a maritime choke point that typically handles about a fifth of global oil and natural gas. This disruption has tightened supplies and pushed the average retail price of gasoline in the U.S. above $4 per gallon.
President Donald Trump has responded with blunt public pressure. On August 3, Trump told reporters at the White House that major oil companies are making too much money based on a shortage
and stated, I don’t like it.
Meg O’Neill’s Pivot Back to Oil and Gas
While the profits are soaring, BP’s new CEO Meg O’Neill, who took over in April, is overseeing a strategic retreat from renewables. The company has launched the process to sell Archaea Energy, a U.S. biogas business BP purchased for $4.1 billion in 2022. This move marks the finality of a renewables expansion strategy that the company abandoned in early 2025.
O’Neill is not celebrating the current windfall as a sign of stability. She has admitted that the company’s recent performance has not met its own or its shareholders’ expectations. To fix this, she has outlined five specific priorities: strengthening the balance sheet, simplifying the portfolio, tightening investment discipline, improving operational performance, and accelerating decision-making.
“We are not making the most of our potential. Our performance over the past few years has not met our own expectations, let alone those of our shareholders. We have not delivered consistently; we have written off too much value; and our costs and liabilities are not resilient enough in a low price environment.”
Meg O’Neill, BP CEO, via Reuters
As part of this simplification drive,
BP has already completed the sale of its Gelsenkirchen refinery to the Klesch Group, a move expected to lower underlying operating expenditure by around $1 billion. The company also intends to exit the UK North Sea after six decades of production.
Financial Health and Shareholder Returns
BP’s balance sheet shows a focused effort to reduce debt while rewarding investors. The company increased its second-quarter dividend by 4 per cent to 8.66 cents per ordinary share.
| Financial Metric | Q2 2026 Value | Context/Trend |
|---|---|---|
| Underlying Replacement Cost Profit | $5.7 billion | Beat $5 billion LSEG consensus |
| Operating Cash Flow | $10.9 billion | Includes $1 billion working capital build |
| Net Debt | $22.25 billion | Down from $25.3 billion in March |
| Expected 2026 CapEx | $13.5B – $14B | Up from previous $13B – $13.5B guidance |
Industry Pushback and Political Tension
The tension between the White House and the energy sector is personal. President Trump specifically targeted Chevron CEO Mike Wirth on Truth Social, claiming Wirth failed to acknowledge that his success was due to Trump administration policies. Trump highlighted Chevron’s return to Venezuela as a key example of this success.
The industry, however, rejects the idea that corporate greed is driving prices. A spokesperson for the American Petroleum Institute argued that high prices are driven by global supply, demand, and uncertainty in the Strait of Hormuz, rather than the actions of individual corporations.
The immediate future for the industry depends on the resolution of the Iran conflict. While Brent crude fell more than 4% on Monday to about $84 a barrel amid hopes for diplomatic progress in ending the conflict, the lag in retail pricing means the political pressure on oil majors is unlikely to vanish overnight.
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