British oil giant BP reported fourth-quarter profits broadly in line with market expectations on Tuesday, while announcing a suspension of share buybacks as it moves to protect its balance sheet amid sustained pressure from weaker crude prices.
The London-listed energy group posted underlying replacement cost profit of $1.54 billion for the final quarter of 2025, matching analyst expectations compiled by LSEG and reflecting resilient operational delivery in a challenging market.
For the full year, BP reported net profit of $7.49 billion, narrowly missing forecasts of $7.58 billion and marking a decline from nearly $9 billion recorded during 2024 as commodity prices softened, the Financial Times reported.
Board Prioritises Financial Resilience
BP said its board had decided to suspend share buybacks entirely, choosing instead to allocate surplus cash toward strengthening the company’s balance sheet and improving financial flexibility during a more volatile pricing environment.
The company’s most recent buyback programme totalled $750 million and had been announced alongside third-quarter earnings in November, following earlier reductions under the group’s strategic reset earlier in the year.
For the fourth quarter, BP declared a dividend of 8.320 cents per ordinary share, signalling continued commitment to shareholder distributions despite the decision to pause repurchases.
“2025 was a year of strong underlying financial results, strong operational performance, and meaningful strategic progress,” interim chief executive Carol Howle said in a statement.
“We have made progress against our four primary targets – growing cash flow and returns, reducing costs, and strengthening the balance sheet – but know there is more work to be done, and we are clear on the urgency to deliver,” she added.
Leadership Transition And Market Reaction
BP is preparing for a leadership transition, with Woodside Energy chief executive Meg O’Neill set to take over on April 1 following Murray Auchincloss’s decision to step down late last year.
Shares in BP fell nearly 4% in early afternoon trading, trimming heavier losses from earlier in the session as investors digested the buyback suspension and broader sector pressures.
The company reported fourth-quarter net debt of $22.18 billion, down from roughly $23 billion a year earlier, while operating cash flow rose to $7.6 billion from $7.43 billion.
BP also set its 2026 capital expenditure budget at between $13 billion and $13.5 billion, aligning spending plans with the lower end of its previously stated guidance range.
Sector Faces Commodity Headwinds
The results come during a difficult period for Europe’s oil and gas sector, after oil prices suffered their largest annual decline since the Covid-19 pandemic due to persistent oversupply concerns.
Lower prices have intensified scrutiny of Big Oil’s ability to sustain shareholder returns while funding energy transition investments and maintaining financial discipline.
BP’s rivals Equinor and Shell both reported weaker quarterly earnings last week, citing softer crude prices alongside operational and market-related challenges.
Equinor said it would cut share buybacks to $1.5 billion this year from $5 billion previously, while also scaling back investments in renewables and low-emission energy projects.
Shell, by contrast, maintained its buybacks at $3.5 billion, marking its seventeenth consecutive quarter with repurchases of $3 billion or more.
Analyst Sees Prudent Shift
Maurizio Carulli, global energy analyst at Quilter Cheviot, said BP’s decision to pause buybacks reflected a cautious but sensible response to current market conditions.
“Under former CEO Murray Auchincloss’s ‘strategy reset’ last April, buybacks had already been reduced from $1.75bn per quarter to $750m. The decision to cancel them entirely signals a more cautious stance and a clear focus on financial resilience,” Carulli said.
“While the move was not a complete surprise to the market, particularly after similar actions by other oil majors, some shorter-term investors may be disappointed, which helps explain the share price weakness seen today. However, prioritising balance sheet strength in a softer commodity price environment is a prudent step.”
