BP and Shell, two of the UK’s largest oil companies, are expected to report lower profits in their upcoming third-quarter earnings releases.
BP will announce its results on Tuesday, followed by Shell on Thursday. The anticipated profit decline is mainly due to weak oil prices and a global demand slowdown, with both companies warning of shrinking profit margins in their refining businesses.
Shell’s net income for the quarter is projected at £5.4bn, a 14% decrease from last year, while BP’s is expected to drop 30% to £1.7bn.
These pressures are reflected in the broader market, with the FTSE 100 down 27 points at 8,242 and BP’s shares falling 14% this year.
Recent geopolitical tensions have also impacted oil prices; despite initial increases due to fears over Middle Eastern energy sites, prices fell over 4% after Iran downplayed Israeli strikes.
OPEC’s recent downgrade of global oil demand growth forecasts for 2024 and 2025 adds to the uncertainty, reflecting economic slowdowns in major economies like China and the rise of electric vehicles.
In response to these challenges, BP’s CEO is scaling back renewable energy plans, while Shell’s CEO Wael Sawan has suggested relocating the company’s listing from London to New York, citing the UK capital as undervalued.
