First quarter 2026 results

Highlights

1Q26 underlying replacement cost (RC) profit* $3.2 billion

•  Underlying RC profit for the quarter of $3.2 billion, compared with $1.5 billion for the previous quarter. Compared with the fourth quarter 2025, the underlying result reflects exceptional oil trading contribution and stronger midstream performance. The underlying effective tax rate (ETR)* in the quarter was 32%, compared with 43% for the previous quarter, which reflects changes in the geographical mix of profits.
• Reported profit for the quarter was $3.8 billion, compared with a loss of $3.4 billion for the fourth quarter 2025. The reported result for the first quarter is adjusted for inventory holding gains* of $3.2 billion (net of tax) and a net adverse impact of adjusting items* of $2.5 billion (net of tax) to derive the underlying RC profit. Adjusting items include adverse pre-tax fair value accounting effects of $1.1 billion and post-tax net impairments of $0.4 billion (see page 24 for more information on adjusting items).

Segment results

• Gas & low carbon energy: The RC profit before interest and tax for the first quarter 2026 was $1.1 billion, compared with a loss of $2.2 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.3 billion, the underlying RC profit before interest and tax* for the first quarter was $1.3 billion, compared with $1.4 billion in the fourth quarter 2025. This reflects realizations remaining broadly flat including the adverse impact of price lags. The gas marketing and trading result was average.
• Oil production & operations: The RC profit before interest and tax for the first quarter 2026 was $1.7 billion, compared with $1.7 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.3 billion, the underlying RC profit before interest and tax for the first quarter was $2.0 billion, compared with $2.0 billion for the fourth quarter 2025. This reflects the divestment in the North Sea offset by higher realizations including the adverse impact of the price lags.
• Customers & products: The RC profit before interest and tax for the first quarter 2026 was $2.5 billion, compared with $1.4 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.8 billion, the underlying RC profit before interest and tax (underlying result) for the first quarter was $3.2 billion, compared with $1.3 billion in the fourth quarter 2025. The customers first quarter underlying result was higher by $0.1 billion, reflecting seasonally lower volumes and lower retail fuels margins, more than offset by a stronger midstream performance, including stronger supply optimization across our integrated value chain and one-off timing effects, and a lower underlying operating expenditure. The products first quarter underlying result was higher by $1.7 billion. In refining, the result reflects higher realized refining margins, a higher throughput driven by lower turnaround activity and the recovery following reduced capacity at the Whiting refinery in the fourth quarter, and crude selection timing effects. The oil trading contribution was exceptional.

Operating cash flow $2.9 billion and net debt* $25.3 billion

• Operating cash flow for the quarter, after a $6.0 billion working capital* build (after adjusting for inventory holding gains, fair value accounting effects and other adjusting items), was $2.9 billion. The working capital build of $6.0 billion reflects three main factors: around $4.1 billion related to seasonal working capital effects, higher levels of inventory reflecting longer shipping routes and the rising price environment through the quarter; $1.1 billion related to the timing of payments; and $0.8 billion of other items, primarily related to the settlement payments in the Gulf of America.
• Net debt increased to $25.3 billion at the end of the first quarter compared with $22.2 billion at the end of the fourth quarter 2025, primarily driven by lower operating cash flow.

Our financial frame

• Our first capital allocation priority is a resilient dividend, which is expected to increase by at least 4% per ordinary share a year^(a). For the first quarter, bp has announced a dividend per ordinary share of 8.320 cents.
• We are committed to strengthening the balance sheet and continue to target improving our credit metrics within an ‘A’ grade credit range. We reiterate our primary target of $14 to 18 billion of net debt by end 2027. When considering our capital structure, we also look at other instruments including hybrid bonds and securities or obligations such as leases and our Gulf of America settlement liabilities.
• bp’s hybrid capital includes a notional $13.3 billion of perpetual hybrid bonds made up of a core stack of around $12.0 billion and $1.3 billion issued in 2024 as prefinancing of upcoming redemptions. bp now plans to reduce its perpetual hybrid bond capital to approximately $9  billion, subject to market conditions, as a result of continued balance sheet strengthening and the receipt of cash from our divestment programme. This $4.3 billion reduction is expected to be achieved through the redemption, without replacement, of perpetual hybrid bonds with first call dates in March 2026 of €2.5 billion and March 2027 of £1.25 billion. Following completion of these actions, the remaining $9 billion of perpetual hybrid bonds are currently intended to remain a permanent component of bp’s capital framework.
• We reiterate our 2026 capital expenditure budget in the range of $13-13.5 billion.

(a) Shareholder distributions, including dividends are subject to board discretion, taking into account factors including, but not limited to, current forecasts and credit metrics.