Depending on your perspective, you can say that BP (BP.) is either being buffeted or buoyed by events in the Middle East. The group’s replacement cost profit (a non-IFRS measure that excludes inventory holding gains/losses and fair value accounting effects) came in at $5.73bn (£4.30bn) in the three months to the end of June – more than double the rate in the comparable period in 2025.

There was a notable increase in profitability quarter on quarter, aided by strengthening realised refining margins, a consequence of capacity outage in the Middle East and the spread between Brent crude and West Texas Intermediate prices. 

The rise in adjusted replacement cost profit is also reflected in operating cash flow of $10.9bn, up by around $8bn on the prior quarter, and taking into account a $1bn adjusted working capital build. The cash surge underpinned an increase in the quarterly dividend payout, up from 8.32¢ a share to 8.66¢. 

Ongoing ructions in the Strait of Hormuz have resulted in operational issues, with plant reliability down in the second quarter. Yet output was still heading in the right direction. Total hydrocarbon (liquids/gas) production came in at 2.27mn barrels of oil equivalent (boe) – a slight increase on the first half of 2025 – while the total realised hydrocarbon price was 8 per cent to the good at $46.33 a barrel. The realised crude price in the half stood at $81.26 a barrel, against the interim rate of $67.21 in 2025. 

Market uncertainties have given way to favourable price dynamics on the whole, while the group’s increasingly influential trading activities also provide a degree of insulation against ongoing disruptions. Indeed, quarterly replacement cost profit at the group’s customers and products unit, which includes the oil trading desk, was $4.95bn – well in excess of analyst expectations and the rate achieved in 2025. 

FactSet consensus is for full-year earnings per share of 68.3¢, before a fall to 49.4¢ in 2027. 

The group has reduced its capital expenditure guidance for 2026, but the evolving shape of its portfolio and its continued move away from the renewables space is likely to grab the attention.

New chief executive, Meg O’Neill, is accelerating the realignment of the group’s energy assets. Having taken the decision to exit the UK North Sea interests, the group has also launched a process to sell its US biogas business, Archaea. O’Neill seems to have the bit between her teeth, but we’ll have to wait a little longer to see if her actions push BP’s forward rating more in line with its US peers (short of a move across the pond, of course). Hold.

Last IC view: Hold, 451p, 10 Feb 2026

BP (BP.)    ORD PRICE:559pMARKET VALUE:£87.8bnTOUCH:558.8-559p12-MONTH HIGH:609pLOW: 399pDIVIDEND YIELD:4.4%PE RATIO:11NET ASSET VALUE:372¢NET DEBT:46%Half-year to 30 JunTurnover ($bn)Pre-tax profit ($bn)Earnings per share (¢)Dividend per share (¢)202595.66.0114.716.0202612315.249.616.64% change+29+153+237+4Ex-div:13 AugPayment:18 Sep£1 = $1.33