BP Faces Profit Hit Amid Weak Refining Margins and Low Oil Demand

BP expects its third-quarter profits to drop by up to $600 million due to weak refining margins and lower oil trading results. This highlights a decline in global fuel demand. The oil major's stock has underperformed, and its CEO is adjusting strategies to regain investor confidence.

BP's upcoming financial report is set to reveal a substantial profit decline in the third quarter, with projections of up to $600 million lost, as weak refining margins take their toll.

The global oil refining industry is facing significant profitability challenges, hitting multi-year lows due to decreased fuel demand, post-pandemic. The British oil major's recent second-quarter profit stood at $2.756 billion, using its proprietary net income metric.

Compounding the issue, similar distress signals are emerging from rivals Shell and Exxon Mobil, both of which foresee reduced profits stemming from a slump in oil prices and demand. As BP readies an October report release, CEO Murray Auchincloss's strategy to win back investors is under the microscope, especially as its shares slide by nearly 12% this year.

(With inputs from agencies.)