Pressure is mounting on BP as it grapples with a “weak showing” from its oil trading arm and a massive $5 billion writedown on its green energy portfolio. The update, released ahead of its full-year results, paints a picture of a company in transition, struggling to balance its books amidst a pivot back to fossil fuels. The writedowns specifically target the company’s low-carbon and gas divisions.
The announcement comes just days after Shell issued a similar profit warning regarding its trading division, indicating systemic challenges for oil majors. The drop in oil prices has exacerbated the situation, with Brent crude averaging lower in the fourth quarter compared to the third. 2025 marked the steepest annual fall in oil prices since the onset of the COVID-19 pandemic.
Analysts at AJ Bell noted that the combination of writedowns, weak trading, and softer oil prices suggests the upcoming quarterly results will be “downbeat.” The broker pointed out that while the news is negative, it clears the ledger for incoming CEO Meg O’Neill. She will step into the role in April with the bad news already public, allowing her to focus on future growth.
Geopolitics continues to play a wildcard role in the company’s operating environment. While fears of a supply glut driven by US and Venezuelan production have depressed prices, sudden spikes due to tensions with Iran have provided brief respites. Amidst this volatility, the company is doubling down on debt reduction, successfully lowering its net debt to under $23 billion.
The broader industry context is equally shaky. Deals are falling apart, such as the failed sale of North Sea assets by Shell and Exxon Mobil to Viaro Energy. As commercial conditions shift, the major players are becoming more conservative, and for this British giant, that means a harsh re-evaluation of its green dreams.