BP said on Tuesday it expects its huge oil trading desk to post “exceptional” results for the first quarter, signalling a windfall from the spike in oil prices triggered by the U.S.-Israeli war against Iran.
The company also said its net debt would rise to between $25 billion and $27 billion from just over $22 billion in the previous quarter because of movements in working capital, an accounting measure of short-term liquidity based on current assets minus liabilities.
Global benchmark Brent crude soared to multi-year highs near $120 a barrel after U.S.-Israeli strikes on Iran began in late February, followed by Tehran’s closure of the vital Strait of Hormuz shipping route and attacks on Gulf neighbours.
Brent averaged around $78 a barrel during the January-to-March quarter, compared with $63 in the fourth quarter and $75 a barrel during the same time last year, according to Reuters calculations.
Refining margins rose to $16.9 a barrel in the first quarter from $15.2 in the previous three months, BP said, adding this would help boost results in its refined products business by $100 million to $200 million.
Energy companies typically do not reveal full results of their trading divisions to retain a competitive advantage.
(Reporting by Shadia Nasralla. Editing by Kirsten Donovan and Mark Potter)