second quarter 2026
Filed Aug 4, 2026Stronger earnings; setting priorities to accelerate delivery
Underlying RC profit, profit attributable to bp shareholders and operating cash flow were all substantially higher than the prior-year quarter, supported by higher liquids and gas realizations, stronger realized refining margins, stronger customers performance and a significantly higher oil trading contribution.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales and other operating revenuesother | $69,105 million | – | – |
| Total revenues and other incomeother | $70,114 million | – | – |
| Profit before interest and taxationother | $8,941 million | – | – |
| Profit before taxationother | $7,821 million | – | – |
| Taxationother | $3,491 million | – | – |
| Profit for the periodother | $4,330 million | – | – |
| Profit for the period attributable to bp shareholdersother | $3,911 million | – | – |
| RC profit attributable to bp shareholdersnon-GAAP | $4,628 million | – | – |
| Underlying RC profit attributable to bp shareholdersnon-GAAP | $5,732 million | – | – |
| Inventory holding losses, before taxnon-GAAP | $870 million | – | – |
| Net adverse impact of adjusting items, before taxnon-GAAP | $568 million | – | – |
| Effective tax rate on profit before taxationother | 45% | – | – |
| Underlying ETRnon-GAAP | 34% | – | – |
| Basic profit per ordinary shareother | 24.77 cents | – | – |
| Diluted profit per ordinary shareother | 24.54 cents | – | – |
| Basic profit per ADSother | $1.49 | – | – |
| Diluted profit per ADSother | $1.47 | – | – |
| Underlying RC profit per ordinary sharenon-GAAP | 36.92 cents | – | – |
| Underlying RC profit per ADSnon-GAAP | $2.22 | – | – |
| Operating cash flowother | $10,858 million | – | – |
| Total cash capital expenditureother | $(3,086) million | – | – |
| Organic capital expenditurenon-GAAP | $3,086 million | – | – |
| Inorganic capital expenditurenon-GAAP | — | – | – |
| Divestment and other proceedsother | $609 million | – | – |
| Cash and cash equivalentsother | $37,168 million | – | – |
| Finance debtother | $58,337 million | – | – |
| Net debtnon-GAAP | $22,251 million | – | – |
| Gearingnon-GAAP | 22.6% | – | – |
| Net debt including leasesnon-GAAP | $35,567 million | – | – |
| Gearing including leasesnon-GAAP | 31.8% | – | – |
| Upstream productionother | 2,201 mboe/d | – | – |
| Upstream unit production costsother | $6.62/boe | – | – |
| bp-operated upstream plant reliabilityother | 92.4% | – | – |
| Refinery throughputsother | 1,467 mb/d | – | – |
| bp-operated refining availabilityother | 94.7% | – | – |
| bp average refining indicator marginother | $29.6/bbl | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| gas & low carbon energyHigher realizations including the impact of price lags and the changes in non-Henry Hub natural gas marker prices. | $11,675 million | – | – |
| oil production & operationsHigher liquid realizations including the impact of price lags, production mix benefit, and higher income from equity-accounted entities partially offset by higher exploration write-offs and lower production due to seasonal maintenance in the Gulf of America. | $7,813 million | – | – |
| customers & productsSeasonally higher volumes, higher fuels margins, a stronger Castrol performance, a slightly higher midstream contribution and significantly stronger realized refining margins. | $57,159 million | – | – |
| other businesses & corporateUnderlying RC loss before interest and tax was $345 million, compared with a loss of $38 million for the same period in 2025. | $739 million | – | – |
3Q 2026 and 2026 outlook
- Tax rateUnderlying ETR* for 2026 to be 35-40%
- NoteThird quarter 2026 reported upstream production: 2,100 to 2,250mboe/d.
- Note2026 reported upstream production: 2,180 to 2,270mboe/d.
- NoteUnderlying upstream production is expected to be broadly flat compared with 2025, with production from oil production & operations to be broadly flat and production from gas & low carbon energy to be lower.
- NoteProducts third quarter throughput: 1,300 to 1,360mb/d.
- Note2026 products throughput: 1,360 to 1,410mb/d.
- NoteIncome taxes paid in the third quarter to be around $1 billion higher than the second quarter 2026.
- Notebp intends to repay $1.0 billion of perpetual subordinated hybrid securities issued by a group subsidiary.
- NoteOther businesses & corporate underlying annual charge to be around $1.0 billion for 2026.
- NoteDepreciation, depletion and amortization: $17.0-17.5 billion.
- NoteCapital expenditure: $13.5-14.0 billion.
- NoteDivestment and other proceeds: $8-9 billion in 2026, including approximately $6 billion from the announced Castrol transaction.
- NoteGulf of America settlement payments for the year to be around $1.6 billion pre-tax.
Capital returns
- Announced dividend per ordinary share: 8.660 cents per ordinary share.
- The interim dividend is expected to be paid on 18 September 2026 to ordinary shareholders and ADS holders on the register on 14 August 2026.
- Holders of ADSs are expected to receive $0.5196 per ADS (less applicable fees).
- Repurchase of ordinary share capital in the first half 2026: $(114) million.
- bp intends to repay $1.0 billion of perpetual subordinated hybrid securities issued by a group subsidiary.
What drove it
- Underlying RC profit mainly reflected higher liquids and gas realizations including the impact of price lags, stronger realized refining margins and a stronger customers result.
- The second-quarter customers result was higher by $0.8 billion, reflecting seasonally higher volumes, higher fuels margins, a stronger Castrol performance and a slightly higher midstream contribution, partly offset by lower contribution from bioenergy.
- The products result was higher by $1.0 billion, reflecting significantly stronger realized refining margins, partly offset by higher planned turnaround and maintenance activity and the third-party event at Whiting in April.
- The oil trading contribution for the second quarter was significantly higher compared with the same period in 2025.
- Underlying operating expenditure was $5,333 million, compared with $5,457 million in the second quarter 2025.
- Structural cost reduction in the first half 2026 was $(782) million and cumulative structural cost reduction at 30 June 2026 since 2023 was $(3,543) million.
Concerns
- bp-operated upstream plant reliability was 92.4%, compared with 95.7% in the first quarter 2026.
- Reported upstream production of 2,201 mboe/d was lower than 2,300 mboe/d in the second quarter 2025.
- bp-operated refining availability was 94.7%, compared with 96.4% in the second quarter 2025.
- Tier 1 and tier 2 process safety events were 18, compared with 5 in the second quarter 2025.
- Exploration write-offs in oil production & operations were $478 million, compared with $81 million in the second quarter 2025, mainly due to the sale of Bay du Nord in Canada.
- The third-quarter customers result is expected to be significantly lower, with broadly flat volumes, a lower midstream result and lower earnings in Castrol due to the lagged impact of higher base oil costs.
- Fuel margins, midstream performance and refining margins are expected to remain sensitive to conditions and developments in the Middle East.
What to watch
- Third-quarter reported upstream production guidance of 2,100 to 2,250mboe/d includes continued disruption in the Middle East, reduced equity interest in Latin America and an estimated impact of around 40mboe/d for potential seasonal weather events in the Gulf of America.
- Completion and financial effects of the planned Castrol transaction, expected by the end of 2026 subject to regulatory approvals.
- The announced process to market Archaea Energy for a potential sale and the intention to market the North Sea business for a potential sale.
- Delivery of 2026 capital expenditure of $13.5-14.0 billion and divestment and other proceeds of $8-9 billion.
- Progress in operational reliability following planned maintenance, Middle East disruption and lower refinery crude processing.
Balance sheet and cash flow
- Operating cash flow was $10,858 million, compared with $6,271 million in the second quarter 2025.
- Total cash capital expenditure was $(3,086) million, compared with $(3,361) million in the second quarter 2025.
- Net cash used in investing activities was $(2,446) million.
- Net cash used in financing activities was $(6,993) million.
- Cash and cash equivalents were $37,168 million at 30 June 2026, compared with $36,556 million at 31 December 2025.
- Finance debt was $58,337 million at 30 June 2026, compared with $57,958 million at 31 December 2025.
- Net debt was $22,251 million at 30 June 2026, compared with $22,182 million at 31 December 2025.
- During the second quarter, pre-tax payments of $1,129 million were made relating to the 2016 consent decree and settlement agreement with the United States and the five Gulf coast states.
Analysis
BP reported a much stronger second quarter under IFRS. Profit attributable to bp shareholders was $3,911 million, compared with $1,629 million in the second quarter 2025 and $3,842 million in the first quarter 2026. Underlying RC profit, a non-IFRS measure, was $5,732 million, compared with $2,353 million a year earlier and $3,198 million in the first quarter. Sales and other operating revenues were $69,105 million, while operating cash flow was $10,858 million.
The earnings improvement was broad based across the operating businesses. Gas & low carbon energy underlying RC profit before interest and tax was $2,122 million, driven by higher realizations including price lags and changes in non-Henry Hub gas-marker prices. Oil production & operations underlying RC profit before interest and tax was $3,581 million, reflecting higher liquid realizations, production mix benefit and higher equity-accounted income, partly offset by exploration write-offs and lower production due to seasonal maintenance. Customers & products delivered underlying RC profit before interest and tax of $4,954 million, supported by higher fuels margins, stronger Castrol performance, seasonally higher volumes and significantly stronger realized refining margins.
Operating delivery was less favorable than the financial result. Upstream production was 2,201 mboe/d, compared with 2,300 mboe/d in the second quarter 2025, and bp-operated upstream plant reliability was 92.4%, compared with 96.8% a year earlier. Refinery throughputs increased to 1,467 mb/d from 1,288 mb/d, but bp-operated refining availability was 94.7%, compared with 96.4%. Management cited planned maintenance and the conflict in the Middle East, while identifying the need for more consistent operational performance.
Capital expenditure was $(3,086) million, compared with $(3,361) million a year earlier. At 30 June 2026, finance debt was $58,337 million and net debt was $22,251 million. The company announced an 8.660 cents per ordinary share interim dividend and expects to repay $1.0 billion of perpetual subordinated hybrid securities. Portfolio actions included completion of the Gelsenkirchen refinery sale, the announced Austria retail-business sale, the intention to market the North Sea business and the launch of a process to market Archaea Energy.
Third-quarter guidance calls for reported upstream production of 2,100 to 2,250mboe/d and products throughput of 1,300 to 1,360mb/d. BP expects a significantly lower customers result, owing to lower midstream performance and lower Castrol earnings from lagged higher base-oil costs. For 2026, bp now expects reported upstream production of 2,180 to 2,270mboe/d, depreciation, depletion and amortization of $17.0-17.5 billion, underlying ETR of 35-40%, capital expenditure of $13.5-14.0 billion and divestment and other proceeds of $8-9 billion.
Management, verbatim
Financially, we delivered a strong quarter, with an underlying replacement cost profit of $5.7 billion ($2.5 billion higher than last quarter) and an operating cash flow of $10.9 billion.
Meg O’Neill, Chief executive officer
But there are areas where our performance fell short. Operationally, our plants didn’t run as well as they did last quarter – upstream plant reliability was 92.4%, compared to 95.7%, and production was down and our refineries processed less crude.
Meg O’Neill, Chief executive officer
We have not delivered consistently; we have written off too much value; and our costs and liabilities are not resilient enough in a low price environment.
Meg O’Neill, Chief executive officer
Not in the filing
stated, not guessed- Free cash flow was not reported.
- Gross margin was not reported.
- Company-wide operating income was not reported as a separately labelled line item.
- Share repurchases for the second quarter 2026 were not reported as a separate quarterly cash-flow figure.
- Prior-quarter comparisons for sales and other operating revenues, operating cash flow, capital expenditure, cash and debt were not printed on their own line items.
- Prior outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.