BP has signalled a period of significant market volatility in its latest trading statement for the first quarter of 2026, amid geopolitical tensions in the Middle East.
The UK-based oil major noted that the conflict in the Middle East have driven crude oil and natural gas prices higher and that these conditions have increased the dislocation between marker prices and those realised by the business.
BP expects an exceptional performance from its oil trading division, compared to weaker results reported in the fourth quarter of 2025.
This uplift is supported by stronger refining margins, with the BP Refining Indicator Margin rising to an average of US$16.9 per barrel, up from US$15.2 in the previous quarter.
Brent crude prices also surged, averaging US$81.13 per barrel during the period, compared to US$63.73 in the fourth quarter of 2025.
Despite the trading tailwinds, the company faces a significant climb in net debt, which is expected to reach between US$25 billion and US$27 billion by the end of the first quarter, up from US$22.2 billion at the end of 2025.
BP attributed this rise primarily to a substantial working capital build of US$4 billion to US$7 billion, driven by the current price environment and the impact of price lags on production in regions like the Gulf of America and the UAE.
Operational output remains steady, with reported upstream production expected to be broadly flat at 2,344 thousand barrels of oil equivalent per day.
Within this, gas and low-carbon energy output is projected to be slightly higher, while oil production is expected to dip marginally.
Capital expenditure remains consistent with previous guidance, expected to hold steady at $3.5 billion.
BP is scheduled to release its full financial results for the first quarter on April 28.
