Closing summary
Time to recap:
The United Arab Emirates has quit the Opec oil cartel in a heavy blow to the group and its de facto leader, Saudi Arabia, amid the global energy shock caused by the Iran war.
The stunning loss of the UAE, a longstanding Opec member, could create disarray and weaken the group, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
Opec Gulf producers have already been struggling to ship exports through the strait of Hormuz, a narrow choke point between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of Iranian threats and attacks against vessels.
The UAE’s energy ministry said that the constraints on the strait meant the decision to leave would not have a huge effect on the market. Leaving Opec will give it greater “flexibility” and was in line with its “long-term strategic and economic vision”, he said.
Analysts said the decision would weaken Opec, and could lead to higher oil production by the UAE – once the disruption caused by the Iran war has ended.
The news came hours after BP reported its profits doubled in the first quarter of this year, thanks to an ‘exeptional’ performance by its oil trading division.
The surge in earnings was condemned by several campaign groups.
The UAE’s decision had been rumored as a possibility for some time, Associated Press points out.
The UAE has pushed back in recent years against OPEC production quotas it felt had been too low — meaning it wasn’t able to sell as much oil to the world as it had wanted.
Regional politics are also likely at play. The UAE has had increasingly frosty relations with Saudi Arabia, OPEC‘s largest producer, over political and economic matters in the Mideast, even after both came under attack by fellow OPEC member Iran during the war.
Chip stocks slide after OpenAI 'misses key targets'
Some US technology stocks are weakening today, following a report that artificial intellience group OpenAI has recently missed its own targets for new users and revenue.
The Wall Street Journal has reported that these “stumbles” have raised concerns about whether OpenAI can support its massive spending on data centers.
The WSJ says:
Chief Financial Officer Sarah Friar has told other company leaders that she is worried the company might not be able to pay for future computing contracts if revenue doesn’t grow fast enough, according to people familiar with the matter.
Board directors have also more closely examined the company’s data-center deals in recent months and questioned Chief Executive Sam Altman’s efforts to secure even more computing power despite the business slowdown, the people said.
Shares in Nvidia have dropped by over 2% in early trading in New York, while chip designer ARM are down over 7%.
Kathleen Brooks, research director at XTB, suggests the “AI theme” that has been pushing up markets could now be under threat:
OpenAI is the poster child for AI and its capabilities and ambitions. Its touted IPO is expected to raise close to a $1 trillion, but if it is struggling with sales then it could limit its spending on data centres, which would be a blow to the speed of AI uptake. This news may threaten the AI investment theme that has driven US stock markets to record highs.
The spending scrutiny could limit OpenAI’s ambitions, which may slow down the speed of AI uptake more generally, considering how central OpenAI has become to the AI revolution.
World Bank warns commodity prices rising sharply
Away from the Opec news…. the World Bank has published its latest Commodity Markets Outlook which warns - not surprisingly - that prices are rising sharply, with knock on effects for inflation and growth across the developing world.
The Washington-based Bank’s economists suggest energy costs are likely to be up 24% for 2026 as a whole, with fertiliser prices up 31%, driven by a 60% rise in the price of key input urea. The report points to a warning from the World Food Programme that higher costs for farmers could plunge up to 45m more people into food insecurity.
World Bank chief economist Indermit Gill says:
“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive.”
They expect Brent crude oil prices to average $86 a barrel in 2026, up sharply from $69 a barrel in 2025: assuming the disruption in the strait of Hormuz starts to dissipate by the end of May.
However, the World Bank warns prices could average a much higher $115 a barrel, if the war is more prolonged.
Capital Economics: UAE could pump 1m barrels per day more outside Opec
The UAE’s dash to the Opec exit door may mean that global supplies will be higher than would otherwise be the case once the strait of Hormuz re-opens.
David Oxley, chief climate and commodities economist at Capital Economics, says the UAE has been itching to pump more oil, so it will have more flexibility to do so once it’s outside Opec.
He also believes that the ties binding OPEC members together have “loosened”.
Oxley told clients:
The UAE’s desire to pump more oil has been placated up to now by a combination of the rest of OPEC turning a blind eye to its overproduction and also raising its quota levels. But speculation about the UAE’s future in the group has whirled in the past.
Of course, the prospect of the UAE pumping more oil is somewhat moot at present given the ongoing near-complete cessation in energy flows through the Strait of Hormuz. While the UAE has been able to utilise its pipeline to Fujairah to bypass the Strait to a certain extent, this option is currently running close to capacity. That said, as and when energy flows eventually get back to normal, the departure from OPEC+ could feasibly result in the UAE pumping an additional 1m bpd (~1% of global oil demand) – so around 4.5m bpd in total. The UAE is well placed to increase supplies and live with lower oil prices (particularly compared with other Gulf economies) given its relatively diversified economy and lower reliance on oil revenues.
Analyst: UAE's exit could create oil market volatility
Jorge Leon, analyst at Rystad, says the UAE withdrawal marks a significant shift for OPEC.
Leon explains:
Alongside Saudi Arabia, it is one of the few members with meaningful spare capacity—the mechanism through which the group exerts market influence.”
“While near-term effects may be muted given ongoing disruptions in the Strait of Hormuz, the longer-term implication is a structurally weaker OPEC. Outside the group, the UAE would have both the incentive and the ability to increase production, raising broader questions about the sustainability of Saudi Arabia’s role as the market’s central stabiliser — and pointing to a potentially more volatile oil market as OPEC’s capacity to smooth supply imbalances diminishes.”
The UAE did have the third-highest production quota within the Opec system, behind Saudi Arabia and Iraq, as this chart of the quotas agreed for May shows:
Analyst: A pivotal event, but...
The UAE’s decision to quit Opec and Opec+ from this Friday is “undoubtedly, a pivotal event for the global energy market,” says Michael Brown, senior research strategist at brokerage Pepperstone.
However, the near-term implications of the move are likely to be relatively limited, due to the massive disruption to energy shipments due to the Iran war.
Brown explains:
Though the UAE have pledged to ‘gradually’ increase production after their departure, it goes without saying that actually doing so at present is somewhere between difficult, and impossible. As the US-Iran conflict continues, and the Strait of Hormuz remains impassable, the most significant issue for the crude market is not production, but actually shipping product to where it is needed. Today’s announcement does not change anything on that front.
Still, the UAE’s pre-conflict output target of 5mln bpd in 2027 could now prove more likely to be achieved, in turn helping crude benchmarks to normalise in shorter order once the ongoing Middle East conflict comes to an end.
He adds that the UAE has clearly been dissatisfied with Opec for some time, believing that its quotas are an unfair limit, which constrain its major infrastructure investment projects.
Updated
Snap analysis: a blow to Opec, but a boost to Trump?
The UAE’s decision to quit Opec is a blow to the group, but could potentially please the White House.
Under normal times, Opec’s production quotas restrict how much oil a member state can sell on the markets. Once the UAE has left, it will be free to pump more – which could push down prices.
Of course, that’s not a factor until the strait of Hormuz is reopened.
But it could put downward pressure on prices in the long term. Back in 2018, President Donald Trump on Friday accused Opec of keeping oil prices artificially high, by restraining how much oil was being released onto the markets.
Then in 2025, Trump accused Opec’s oil producers of prolonging the Ukraine war by failing to cut prices, as he demanded cheaper oil.
Opec hasn’t always managed to stay united. In March 2020 they failed to agree production cuts when the Covid-19 pandemic hit the world economy, before agreeing a deal the next month.
Opec currently includes 12 members, including Iran, Iraq, Saudi Arabia and Kuwait. The current Middle East conflict has created tensions within the group.
In March, Iran launched a successful drone attack on the UAE’s Shah gas field, and also attacked the United Arab Emirates port of Fujairah – which lies just outside the strait of Hormuz, while its other export hubs are located within the Gulf.
Tensions have also been growing between the UAE and Saudi Arabia, which is the dominant player within Opec. The two countries have been supporting different groups in Yemen – culminating in Saudi Arabia bombing what it said was a shipment of weapons for Yemeni separatists that had arrived from the UAE in December.
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The UAE insists it has been a loyal member of Opec, saying:
During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all.
However, the time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets.
UAE quits Opec group
Newsflash: The United Arab Emirates has announced it is quitting the Opec group of oil producers.
In an unexpected move, the UAE is leaving Opec and Opec+ (which includes allies such as Russia) from 1 May, a move which could allow it – in theory – to produce more oil and gas.
The UAE’s energy ministry says in a statement that the decision “reflects the UAE’s long-term strategic and economic vision and evolving energy profile”, and follows a “comprehensive review” of its production policy, and its current and future capacity.
Opec, created back in 1960, agrees and sets production quotes for members in an attempt to control the oil price. The UAE is a long-standing member, having joined in 1967.
The UAE pledges to “act responsibly” after it quits Opec, saying it will bring “additional production to market in a gradual and measures manner” in line with demand and market conditions.
In the short-term, though, the UAE – like many Opec members in the Gulf – faces the serious challenge of the blockade on the strait of Hormuz (many of the UAE’s oil export hubs are within the Gulf).
Updated
UK government borrowing costs approaching highest since 2008 crisis
UK government borrowing costs are heading towards their highest levels since the financial crisis in 2008, as the Iran war drags on.
The yield, or interest rate, on 10-year UK gilts has risen to 5.02% so far today, up 5 basis points (0.05 percentage points), approaching the 18-year high of 5.11% hit on 23 March.
That’s broadly in line with other government bond moves – the yield on US 10-year Treasury bonds is up 3 basis points to 4.36%.
The yield on German 10-year debt, usually a safe haven, is also up 4bps. Yields rise when prices fall.
The jump in the oil price is threatening to destabilise government finances – weaker economic growth will hurt tax revenues, while any energy support packages might add to government borrowing.
Overnight, investment group BlackRock warned that higher government bond yields are “here to stay” as the Iran war puts upward pressure on inflation.
The weakness in UK government bonds may also reflect political stability, as prime minister Keir Starmer faces the threat of a standards investigation into his decision to appoint Peter Mandelson as ambassador to the US. His former chief of staff, Morgan McSweeney, is testifying about the issue today.
Updated
Rachel Reeves also pledged to do everything possible to help people renting their homes in the private sector.
After the Guardian reported this morning that the chancellor is considering a one-year freeze on rent increases, she told MPs:
“I will do everything in my power and use every lever we have to bear down on the cost of living, including for people in the private rented sector.”
Bloomberg are reporting that Saudi Aramco is suspending liquefied petroleum gas shipments next month after damage to its main export facility in late February – just before the Iran war began – cut off supplies of the fuel.
The state producer informed buyers recently that shipments from the Juaymah LPG facility would continue to be suspended through May, “according to people familiar with the matter”.
Shipments from Juaymah were halted in the week before the US-Israeli bombing of Irann began, after a part of the delivery system carrying propane and butane was structurally damaged.
Juaymah is on the Saudi coastline in the Gulf, so shipments would be disrupted anyway by the closure of the strait of Hormuz….
Reeves: Important to keep windfall tax on oil and gas companies
Chancellor Rachel Reeves is pledging to stick with the current windfall tax on oil and gas companies in the UK.
Asked about BP’s surge in profits, at Treasury questions in Parliament today, Reeves says the Energy Profits Levy allows the government to tax some of the profits made by energy giants during the Iran war.
The chancellor tells MPs:
The oil and gas sector will play an important part in our energy mix for many years to come, and we need to support them, as we are for example through tiebacks.
But it is important that the energy profits levy remains in place for now. During this conflict we will be able to capture the profits made in the UK through the windfall tax.
The Conservatives and Reform oppose this tax, and this would simply mean even higher profits for the oil and gas industry.
The Energy Profits Levy is 38%, lifting the headline rate of tax on upstream oil and gas activities to 78%. It only applies to a company’s earnings within the UK, though, and doesn’t catch profits made in the rest of the world.
GM: Tariffs will cost us $500m less after Supreme Court ruling
US carmaker GM has lifted its profit forecasts, after Donald Trump’s Supreme Court defeat over his sweeping tariffs.
GM has lifted its guidance for adjusted EBIT (earnings before interest and tax) this year, after “a favorable adjustment” of approximately $500m resulting from the ruling that tariffs claimed under the International Emergency Economic Powers Act were unlawful.
GM now expects gross tariff costs of $2.5bn to $3.5bn in 2026, down from the original estimate of $3.0bn to $4.0bn.
Earlier this month, the Trump administration began accepting applications from businesses seeking refunds for more than $166bn in tariffs, after the supreme court ruled in February that the president had no legal authority to impose them.
NatWest chair: we believe deeply in UK's long-term strengths
NatWest’s AGM is up and running again, after that earlier disruption, and chair Rick Haythornthwaite is telling investors that the UK’s economy still has “long-term” strengths.
Haythornthwaite says:
Over recent years, uncertainty and volatility have been a persistent feature of our operating environment. Growth is present, but it is uneven. It varies by sector, by region and by levels of financial resilience, and it demands discipline and selectivity. What has been striking over the past year is that behaviours have often proved more resilient than sentiment. Across households and businesses, people continue to plan, invest and adapt, even in the face of uncertainty, but with greater discipline and a renewed focus on returns and value for money.
We should be clear: there are near-term challenges. Recent global events mean pressures have elevated for many households and businesses. From a Board perspective, maintaining a longer‑term view is essential, and we believe deeply in the long-term strengths of the UK.
NatWest AGM disrupted
Over in Edinburgh, NatWest bank has begun its annual meeting with shareholders, and then briskly adjourned it.
There was some shouting, and then some singing, audible on the live feed from the AGM before it was suspended – for 15 minutes, although it’s been longer now….
Campaign groups had already called for protest votes against the bank’s chair, Rick Haythornthwaite, today, amid accusation of ‘climate backtracking’ by the bank.
Reuters are reporting that climate protesters disrupted the meeting, according to a spokesperson.
BP’s profit surge in the first quarter of this year probably won’t last, due to the disruption to energy infrastructure since the Iran war began, predicts Kathleen Brooks, research director at XTB.
After BP reported results that “smashed expectations”, Brooks says:
In fairness, an oil major that makes bags of money during an energy price shock should not be a surprise. Its share price was higher by 3%, after it reported profits of $3.8bn, driven by strong oil trading revenue.
This is a good start for new CEO Meg O’Neil, but the question is, will it last? The answer is most likely no, as the company also noted flat production levels due to disruption at its sites in the Middle East.
Updated
UK grocery inflation slows
UK grocery inflation has slowed this month, new data shows, despite the disruption caused by the Iran war.
Worldpanel by Numerator has reported that like-for-like grocery inflation fell to 3.8% in the four weeks to 19 April, which is the lowest rate in a year.
Prices are rising fastest in markets such as medicines & treatments, fresh unprocessed meat and fresh unprocessed fish, and are falling fastest in chilled butter & spreads, sugar confectionery and household paper.
The survey found that shoppers are seeking out deals due to concerns about rising prices – spending on promoted items rose by 7.8% year on year.
Fraser McKevitt, head of retail and consumer insight at Worldpanel by Numerator, explains:
“Concerns about the impact of the Middle East conflict on prices of everyday goods are front of mind for British households. Already feeling the squeeze at the petrol pump, shoppers are responding by turning to special offers in growing numbers when buying groceries.”
Updated
Bloomberg: Japanese crude oil supertanker attempting to sail through strait of Hormuz
A laden Japan-linked supertanker appears to sailing through the Strait of Hormuz, in what may be the first attempt by an oil carrier from the country to leave the Gulf since the Iran war began.
Bloomberg has the details:
The Idemitsu Maru began sailing late Monday toward the strait from northwest of Abu Dhabi, where it had idled for more than a week, tracking data show.
It appeared to turn north toward Iran’s Qeshm and Larak Islands, then sail past Larak toward the eastern side of the strait. It’s carrying 2 million barrels of crude loaded from Saudi Arabia’s Juaymah terminal in early March.
At the start of April a liquefied natural gas tanker co-owned by the Japanese company Mitsui OSK Lines sailed through the strait.
Tax Justice UK: Profiteering companies should face additional excess profits taxes
The UK government should ‘get a grip’ on energy companies, banks or weapons makers who make excessive profits from the Iran war, and tax those earnings, says Caitlin Boswell, deputy director at Tax Justice UK.
“It is outrageous that households are getting hammered on all sides from rising bills and prices of essentials, while companies like BP are doubling their profits, all from the same crisis. The government needs to get a grip on the situation to stop companies from callous profiteering, whether in the energy sector, banking or defense.
We need the government to remain steadfast in maintaining the windfall tax on oil and gas companies, and apply additional excess profits taxes on those profiting from the crisis. That way, the government can recoup all unearned profits to help people get through the affordability crisis and make the UK more resilient to future shocks.”
Eurozone inflation expectations have jumped
The surge in energy prices since the Iran war began has pushed up inflation expectations across the eurozone.
New data from the European Central Bank this morning shows that median inflation expectations for the next 12 months and for three years ahead have “increased significantly” this month.
The ECB says:
In March, the median rate of perceived inflation over the previous 12 months increased to 3.5%, from 3.0% in February.
Median expectations for inflation over the next 12 months and expectations for inflation three years ahead, which both stood at 2.5% in February, increased in March to 4.0% and 3.0% respectively.
Central banks such as the ECB will use inflation expectations for signs that the jump in energy prices is leading to ‘second round’ effects – higher prices for other goods, or higher wages. Its target is for inflation to run at 2% in the medium term.
Updated
The recent drop in UK mortgage rates seems to have stalled today.
Data provider Moneyfacts reports:
The average 2-year fixed residential mortgage rate today is 5.80%. This is unchanged from the previous working day.
The average 5-year fixed residential mortgage rate today is 5.70%. This is unchanged from the previous working day.
Mortgage rates are still much higher than at the start of March – when the average 2-year fix was 4.83%, and the average 5-year fix was 4.95%.
But they’re lower than the peak on 12 April, when average two-year fixed-rate mortgage were 5.9%, while five-year rates were 5.78% on average.
Consumer Voice challenges FCA compensation scheme for car finance scandal
A consumer group is taking the City watchdog to court in the hope of overhauling a £9.1bn compensation scheme that it claims massively shortchanges victims of the UK car loan scandal.
Consumer Voice has filed a legal challenge to the scheme, in an attempt to change the way compensation is calculated. It fears millions of consumers could otherwise be left out of pocket by hundreds of pounds per claim.
The Guardian reported last week that Consumer Voice was considering a legal challenge against the FCA’s redress programme, which was introduced because some drivers were overcharged for loans as a result of commission payments between lenders and car dealers between 2007 and 2024.
Consumer Voice has also accused the Financial Conduct Authority of designing a scheme that “protects the very firms that failed to follow the law and the rules when these loans were sold”.
Alex Neill, co-founder of Consumer Voice, says
“We support a redress scheme, but this one does not go far enough. Millions of drivers were overcharged through hidden and unfair commission, yet the FCA’s scheme risks leaving many of them missing out on hundreds of pounds they’re owed.
“People have already been let down once by lenders. They should not now be let down again by the regulator that is supposed to protect them. The FCA needs to fix the scheme to ensure it delivers fair and lawful compensation for drivers.”
Last week, the FCA defended its scheme, saying it was “the quickest, fairest way to compensate consumers”, and warning that a legal challenges could delay payouts for millions of people.
Updated
BoJ: Middle East conflict is big downside risk to growth
The head of Japan’s central bank has warned that the Iran war will threaten growth in the world’s fourth-largest economy.
Japan imports nearly all its crude oil for domestic consumption, meaning it is particularly vulnerable to supply disruption and higher prices.
Bank of Japan governor Kazuo Ueda told reporters (translation by Reuters):
“Given high uncertainty surrounding the Middle East conflict, the likelihood of achieving our forecasts has diminished. On the other hand, there is both big downside risk to growth and upside risk to inflation mainly for fiscal 2026. At present, it’s hard to judge the duration and impact on the economy and prices now. The BOJ wants to spend a bit more time scrutinising how the Middle East conflict affects the economy and prices, and whether growth and inflation risks could change.”
Ueda was speaking after the BoJ left interest rates on hold today in a 6-3 split, with three policymakers voting to raise interest rates.
He explained that the BoJ would need to tighten policy if inflation “clearly overshoots” its target, saying:
“We don’t see a strong chance of Japan experiencing a repeat of the 1970s-style oil shock. But one thing in common is that our policy interest rate is below levels deemed neutral to the economy. We will take that into account in guiding policy.”
Full story: BP profits more than double
Although BP enjoyed that ‘exceptional’ oil trading in the last quarter, it is not immune to the damage and destruction wreaked on facilities across the Gulf, warns Susannah Streeter, chief investment strategist at Wealth Club.
The second quarter of this year is set to be weaker due to the disruption, Streeter explains:
The Rumaila oil field in Southern Iraq which it operates as part of a partnership was first closed as a precaution and then struck by drones. Then there’s the overall disruption expected as cargoes mount up and the Strait of Hormuz remains closed. So, while volatile energy prices are set to continue to benefit the trading division, there’s going to be a tale of repair and maintenance costs to bear going forward.
There’s also still the huge uncertainty surrounding future transit through the Strait of Hormuz, with potential tolls still on the table, that’s once the tankers are able to navigate mines planted in the waterway.
Shares in some specialist lenders are dropping this morning, after the Guardian reported that Rachel Reeves is considering imposing a one-year rent freeze on private sector homes, to protect renters from the cost of living crisis.
OSB Group are down 4% and Paragon Banking has dropped by 2.6% – both companies provide buy-to-let mortgages, where demand could weaken if rent controls are brought in.
BP’s surging profits could lead to calls for tougher windfall taxes on the energy sector, suggests Mark Crouch, market analyst for eToro:
“BP’s first-quarter earnings offer a timely reminder of just how abruptly the pendulum can swing in the energy sector. Underlying profits jumped to $3.2 billion, boosted by a powerful mix of elevated prices and exceptional trading conditions, even as disruptions in the Middle East weighed modestly on operations. In many respects, BP has both absorbed and benefited from the same geopolitical tensions, with volatility once again proving a tailwind for an integrated major.
“Refining performance remains robust, and BP’s scale in trading and downstream is clearly being monetised at the right point in the cycle. Combined with shares having touched a 16-year high as recently as March, the market is already showing a greater willingness to back the UK supermajor. While net debt has crept up in the near term, BP’s commitment to deleveraging and disciplined capital allocation should provide a clearer path for shareholder returns.
“The political backdrop, though, remains hard to ignore. Stronger profits, particularly those linked to geopolitical disruption, are likely to revive calls for windfall taxes across Europe as household budgets get squeezed.
The UK already imposes one of the most aggressive regimes globally, leaving BP walking a fine line between capital discipline, shareholder returns and an increasingly complex fiscal backdrop.”
IG: BP walks a tightrope after profit bonanza
BP is walking “a tightrope” after its profit bonanza in the first quarter of the year, reports Chris Beauchamp, chief market analyst at investing and trading platform IG:
“BP’s surge in profits will have other sectors green with envy, but the situation gets trickier from here
Trump’s war has delivered a bonanza for the company and its shareholders, but it is uncomfortably aware that, while oil prices are likely to stay elevated, it is likely to face major disruption due to that same conflict. A lot of that might be offset by higher oil prices, and the shares have taken the optimistic view in early trading.”
Those BP shares are now up 2.8%, still leading the risers on the FTSE 100 share index this morning.
Some jobs saved as Prax Lindsey oil refinery sale completed.
Elsewhere in the energy industry, the sale of the Prax Lindsey oil refinery in north Lincolnshire to US energy company Phillips 66 has been completed.
Back in January, Phillips 66 struck a deal to buy the Prax site after the company collapsed into administration last summer, and integrate it with its nearby Humber refinery.
The deal will save some jobs at Prax.
Of the remaining employees at the sites, 109 have been retained by Phillips 66, and 55 will be made redundant, according to the Insolvency Service.
Official Receiver Gareth Allen says:
The sale of Lindsey Oil Refinery’s assets following a liquidation is the best possible outcome, and this is now complete.
My thanks to the team at the Insolvency Service and the special managers at FTI Consulting LLP.
I am grateful for the commitment, patience and understanding of the leadership team and employees at the site during this time.
Updated
Housebuilder Taylor Wimpey hit by rising energy costs
Although rising energy prices are great news for oil and gas producers, they’re a blow to other businesses, such as housebuilders.
This morning, Taylor Wimpey has reported that the cost of building a home is being pushed up, telling shareholders:
As a result of rising energy costs, build cost inflation is now expected to be low to mid single digit for 2026, with cost pressure and surcharges starting to come through from our supply chain.
The company also reported a small slowdown in sales, which are running at 0.74 per outlet per week so far this year, down from 0.77 at this stage of 2025.
Shares in Taylor Wimpey are down 4%, with other housebuilding stocks such as Persimmon (-2.2%) and Barratt Redrow (-1.1%) also lower this morning.
BP shares up 2% after profits beat
Shares in BP have jumped at the start of trading in London.
BP are leading the risers on the FTSE 100 share index, up 2.1% at 584p, their highest level in over a week.
Updated
BP has reported “strong numbers” this morning, says RBC Capital Markets, beating market expectations by 20%.
RBC Capital Markets told clients:
Looking divisionally, the star of the show was the downstream, with BP reporting higher refining & trading numbers, well in excess of consensus and ~$200m ahead of our estimates for the quarter, supported by exceptional oil trading results. It is also notable that Castrol reported the highest earnings since before 2019 this quarter, however we question whether some of this is driven by temporary factors given gyrations on feedstock/product pricing over the course of March.
This chart, from BP’s financial results this morning, shows how profits surged in the first quarter of this year:
On BP’s profit surge, Mike Childs, head of science, policy and research at Friends of the Earth, says:
“Just as we saw in 2022 following Russia’s invasion of Ukraine, fossil fuel giants are quid’s in when global instability drastically inflates fuel prices. But again, it’s ordinary people who pay the price when soaring energy prices threaten to plunge the UK into an even deeper cost of living crisis.
“If we’re to reduce our vulnerability to energy price shocks, the solution couldn’t be clearer. We must end our reliance on volatile, costly oil and gas by rapidly ramping up investment in cheap, clean, homegrown renewables alongside support for energy efficiency measures.
Oil at three-week high over $110
The deadlock in the Middle East confict has pushed the Brent crude oil price up to a three week high today.
Brent crude is up 1.75% at over $110 a barrel, for the first time since the US-Iran ceasefire was agreed on 7 April.
There are reports overnight that President Donald Trump is unhappy with an Iranian proposal to end the conflict, and reopen the strait of Hormuz, because it did not address Iran’s nuclear program.
One US official has been quoted saying:
“He doesn’t love the proposal.”
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Maja Darlington, climate campaigner for Greenpeace UK, says:
“The oil industry’s capacity to profiteer from human misery is almost limitless. Seventy years after the US first achieved regime change in Iran as a favour to BP, here we are again, risking a global recession by trying to install the West’s man in a petrostate that will do anything to prevent it.
It’s been an entirely predictable disaster for everyone except the oil industry. BP’s profits are booming, with Trump’s bombs bringing billions for them and bigger bills for us. Britain subsidizes this industry to the tune of several billion a year, and yet they’ll still claim to be over taxed. Today’s numbers make a convincing case that the opposite is true.
Global Witness: 'horrifying to see BP’s profits grow' during Iran war
Campaign group Global Witness point out that the Middle East conflict is the second event to give BP ‘bumper profits’ in the last four years.
Patrick Galey, head of news investigations at Global Witness, said:
“It is horrifying to see BP’s profits grow as millions suffer the fallout from the US-Israel war on Iran. Unfortunately we’ve been here before – when Russia invaded Ukraine 4 years ago we saw big oil firms make bumper profits from spiralling fuel costs.
As oil prices drive up bills once again, it’s clear that fossil fuel companies don’t enhance affordability or energy security, they make life worse. They destroy the climate, push up the cost of living, and rake in billions in profit while innocent civilians die.
It’s well overdue that we make oil companies pay for the damage their doing. If they broke it, they need to fix it. It’s clear they can afford to.
BP profits, we all pay.”
BP: Middle East disruption will hit upstream production in Q2
Looking ahead, BP expects a drop in fossil fuel production in the current quarter, partly due to the Iran war.
It says:
Looking ahead, bp expects second quarter 2026 reported upstream production to be lower compared with the first quarter 2026, due to seasonal maintenance predominantly in the Gulf of America and the effects of disruption in the Middle East.
It also expect volumes and fuels margins to “remain sensitive to conditions and developments in the Middle East”.
Introduction: BP profits double as Iran war drives up energy prices
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The Iran war has helped BP to double its profits in the first quarter of this year, its latest financial results show.
The oil major has just reported that it made a profit of nearly $3.2bn in the first three months of 2026, on its favoured ‘underlying replacement cost’ earnings measure.
That’s higher than City analysts had predicted, with BP - which was hit by a shareholder rebellion last week – giving some of the credit to an “exceptional” contribution from its oil trading operations.
These quarterly profits are up from $1.54bn in the fourth quarter of 2025, and $1.38bn in the first quarter of last year.
Q1 2026 includes the surge in oil and gas prices in March, after the war began at the end of February, disrupting energy supplies from the region.
BP’s new CEO, Meg O’Neill, acknowledges the impact of the Middlle East conflict, saying the company is working in an “environment of conflict and complexity”.
O’Neill says BP is “working with customers and governments to get fuel where it’s needed” – at a time when fears of jet fuel shortages are growing.
She adds:
Overall, our business continues to run well. This was another quarter of strong operational and financial delivery, and we made further progress towards our 2027 targets. We had high plant reliability, high refining availability and increased production in the Gulf of America and at bpx Energy, our US onshore business - keeping production levels steady despite the ongoing disruption.
The surge in energy prices is worrying central banks, many of whom are setting interest rates this week.
Overnight, the Bank of Japan left borrowing costs unchanged, but three policymakers did break ranks and vote for a hike….
The agenda
9am BST: ECB survey of Consumer Inflation Expectations in the eurozone (timing corrected)
2pm BST: US house price data: S&P/Case-Shiller Home Price MoM
3pm BST: US consumer confidence data
Updated
