Q2 2022 results for BP’s major tankers

A BP petrol station in Madrid, Spain.

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LONDON — British oil giant BP reported bumper second-quarter earnings on Tuesday, benefiting from a surge in commodity prices.

The British energy major posted a second-quarter profit underlying replacement cost, used as an indicator of net profit, of $8.5 billion.

This compared to a profit of $6.2 billion in the first three months of the year and $2.8 billion for the second quarter of 2021. Analysts had expected BP to report a profit of $6.3 billion in the first quarter, according to Refinitiv.

BP also announced on Tuesday a 10% increase in its quarterly dividend to shareholders, bringing it to 6.006 cents per common share.

Shares of BP are up almost 20% since the start of the year.

BP’s results once again underscore the stark contrast between big oil’s profit windfall and those grappling with a deepening cost of living crisis.

The world’s biggest oil and gas companies have shattered profit records in recent months, following a spike in commodity prices sparked by Russia’s invasion of Ukraine.

For many fossil fuel companies, the immediate priority appears to be returning cash to shareholders through buyback programs.

Last week, BP’s British rival Shell reported record second-quarter results of $11.5 billion and announced a $6 billion share buyback program, while the owner of British Gas Central reinstated its dividend after a massive increase in profits in the first half.

Cost of living crisis

Environmental activists and labor groups have condemned Big Oil’s profit hike and called on the UK government to impose significant measures to reduce the cost of rising energy bills.

Last month, a cross-party group of UK lawmakers called on the government to increase the level of support to help households pay rising energy bills and to introduce a national plan to insulate homes.

A price cap on the most widely used energy tariffs for consumers is set to rise by more than 60% in October due to soaring gas prices, taking average annual household bills to more than £3,200 (3,845 $).

National Energy Action, a charity against energy poverty, has warned that if this happened, it would push 8.2 million households – or one in three UK households – into energy poverty. Energy or fuel poverty refers to when a household cannot afford to heat their home to an adequate temperature.

“Clearly not everyone is grappling with the energy crisis,” said Sana Yusuf, energy campaigner at Friends of the Earth, in reaction to the results from Shell and Centrica. “These windfall profits will be met with disbelief by the millions of people across the UK who are dealing with soaring energy prices.”

Yusuf called on the UK government to impose a tougher windfall tax on energy companies. “Most of these profits should be used to insulate our homes and help cash-strapped households pay for heating this winter, rather than developing more planet-burning fossil fuel projects,” Yusuf said.

The burning of fossil fuels, such as oil and gas, is the main driver of the climate crisis and researchers have found that the production of fossil fuels remains “dangerously out of sync” with global climate goals.

Speaking in June, UN Secretary-General Antonio Guterres called for the abandonment of fossil fuel funding, describing new funding for fossil fuel exploration as “delusional.”

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