BP shares plummet as firm chops buyback amid weakened oil market
British energy giant BP chopped its quarterly share buyback after President Donald Trump’s erratic tariff agenda sent the price of oil tumbling.
BP cuts its buyback to $750m (£559m), compared to $1.75bn the previous quarter.
The firm’s shares dropped nearly four per cent in early trading on Tuesday.
This comes after the cost of a barrel of Brent crude sank below $70 in the fallout of Trump’s levies – the figure BP uses to create its financial targets.
The reporting period came ahead of Trump’s ‘Liberation Day’ on April 2, which slapped sweeping tariffs on all trading partners.
But, London-based firm still faced difficulties as cash flow from operations slumped to the lowest level since the fourth quarter of 2020, when the average price of oil was under $40.
The FTSE 100 conglomerate said its underlying replacement-cost profit – which provides an accurate view of a business’ profitability by excluding non-recurring items – hit $1.38bn. This was below the $1.53bn pencilled in by analysts.
Net debt also surged $4bn from the previous quarter.
Net income nearly halved from the previous year, falling to $1.38bn in the first three months of the year. This missed an average analyst estimate of $1.64bn.
Mark Crouch, market analyst at eToro, said: “BP’s first-quarter earnings update was, as expected, weak and underwhelming.
“The UK supermajor once again missed profit targets for the quarter, however, there does appear to be a silver lining.”
BP facing scrutiny from activist investor Elliott
The oil company has faced pressure from activist investor Elliott which has called on BP to deepen spending cuts and make further divestments.
Elliott is eyeing free cash flow of $20bn by 2027, which is around 40 per cent higher than the company’s current goal.
The company’s chair Hedge Lunch said at the beginning of this month that it was “inevitable” he would step down after the spat with Elliott.
BP announced on 4 April that Lund had notified the board of his plan to withdraw “most likely during 2026”.
This came after BP ditched a radical plan introduced in 2020 that would see the oil giant reinvent itself as a green energy company.
Nearly a quarter of shareholders voted against the re-election of Lunch at the firm’s annual general meeting, as conflict over the decision to axe climate goals continued.
The shift followed news that Elliott had acquired a near five per cent stake in the company and was calling for widespread changes.
Crouch added: “With Elliott Management now on board, falling oil prices might prove to be a blessing in disguise, exposing the company’s underlying vulnerabilities and reinforcing the critical role fossil fuels still play in its long-term future. “
Commenting on the first-quarter results, chief financial officer Kate Thomson said: “In the first quarter, we delivered resilient financial results and are in action to improve the performance of BP.
“Underlying RC profit grew quarter-on-quarter to $1.4bn and we have made good progress on our plans to deliver on our structural cost reduction target.
“Our financial frame provides us with flexibility through cycle. We continue to optimize investment plans and now expect 2025 capital expenditure of around $14.5 billion.”