Energy giant BP has issued a stark warning to investors, forecasting significant financial impairments and revealing a disappointing performance in its oil trading division for the last quarter of 2025.
Financial Headwinds and Impairments
The company stated it expects to record write-downs of between four billion and five billion US dollars (approximately £3 billion to £3.7 billion). These impairments are primarily linked to its gas and low-carbon energy businesses, collectively known as its transition division.
This announcement came alongside news of lacklustre oil trading results for the fourth quarter, a period that saw a notable drop in global crude prices. BP highlighted that the average price for Brent crude during Q4 was $63.73 per barrel, down from $69.13 in the previous three months.
Echoes of a Sector-Wide Challenge
BP's situation mirrors that of its main FTSE 100 rival, Shell, which signalled a weaker trading performance last week. The parallel warnings underscore the pressure facing the entire oil and gas sector as prices fall.
Analysts point to recent geopolitical events as a key driver of the price slump. Actions by US President Donald Trump, including the ousting of Venezuela's leader and a claim on the region's crude reserves, have sparked fears of a potential oversupply in the market, contributing to the downturn.
Debt Reduction and Leadership Change
Amid the financial challenges, BP reported continued progress on strengthening its balance sheet. The company's net debt reduced to between $22 billion and $23 billion (£16.4bn to £17.1bn) at the end of December 2025. This marks a decrease from the $26.1 billion (£19.4bn) recorded at the close of September.
This update follows a major leadership shake-up announced last month. BP appointed Meg O'Neill, the current boss of Woodside Energy, as its new chief executive. She replaces Murray Auchincloss, who stepped down after less than two years in the role.
Carol Howle, BP's executive vice president of supply, trading and shipping, will serve as interim CEO until O'Neill formally begins her duties on 1 April 2026.
O'Neill's appointment is historic: she will be the first woman to lead BP, the first female CEO of a top-five global oil company, and notably, the first outsider to take the helm at the British energy firm.
The market reaction to the latest news was cautious. BP shares fell by 1% in Wednesday morning trading following the announcement.
