Summer Earnings Could Burn Oil Giants

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.

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By Tsvetana Paraskova – Apr 28, 2025, 6:00 PM CDT

Big Oil’s earnings are falling sharply, with firms like BP and Shell expected to post major profit drops in Q1.
Lower oil prices, weaker trading results, and operational issues like maintenance and cyclone disruptions are squeezing margins.
The real test will come in summer Q2 earnings.

The world’s biggest oil and gas firms are set to see their earnings drop this year amid the decline in oil prices and lackluster trading business.

Europe’s Big Oil firms have already flagged weaker first-quarter profits, which they will report in the next two weeks.

Earnings for the second quarter are expected to further decline compared to both Q1 and the same quarter of 2024, as oil prices have crashed by about $10 per barrel since U.S. President Donald Trump launched the tariff offensive against the rest of the world on April 2, two days into the beginning of Q2.

So far this year, the price of Brent Crude has slumped by about 12%. Most of the slide came after the first quarter ended on March 31, so the significantly lower oil prices are set to hit the second-quarter earnings more than the Q1 results.

Still, the UK supermajors BP and Shell, for example, are expected to book an almost $4 billion annual drop in their combined Q1 earnings when they report profits this week.

Company-provided analyst estimates point to BP posting an underlying replacement cost (RC) profit – the closest metric to net profit – of $1.53 billion for the first quarter. This would be $1.2 billion lower than BP’s earnings of $2.7 billion for the first quarter of 2024.

Brokerage analysts who cover Shell expect the other UK supermajor to report adjusted earnings of $5 billion for the first quarter, down by $2.7 billion from the $7.7 billion profit for the same period last year.

Related: Today’s Oil Prices Aren’t Survivable For US Producers

In an update note earlier this month, Shell said it expects its LNG production in the first quarter to have dropped from Q4, due to cyclones and unplanned maintenance in Australia.

In the Integrated Gas division, Shell sees trading and optimization results to be in line with Q4 2024, despite a higher (non-cash) impact from expiring hedge contracts compared to the previous quarter.

Trading and optimization in the Chemicals and Products division is expected to be significantly higher than in Q4 and be in line with Q2 2024 and Q3 2024 contributions on the back of a higher refining margin and increased refinery and chemicals plant utilization.

BP, for its part, expects to post a weak natural gas trading result for the first quarter, as well as lower gas output.

The oil trading result is expected to be “average,” said the company, which also expects oil and gas realizations for the first quarter to be broadly flat compared to the fourth quarter of 2024.

Higher refining margins are expected to contribute between $100 million and $300 million to the first-quarter earnings compared to the prior quarter.

For BP, the stakes are higher as it is being urged by activist shareholder Elliott to cut spending.

The oil price crash that began just after first quarter-end isn’t helping BP in its efforts to convince Elliott that its stock could stop underperforming its peers, including Shell and the U.S. supermajors.

Among the other large international oil and gas companies, U.S. supermajor ExxonMobil said it expects its first-quarter earnings to be higher than in Q4 by up to $2 billion, thanks to higher oil and gas prices and rising refining margins.

Equinor has advised analysts to expect weak liquids and LNG trading results for the first quarter, while TotalEnergies expects its first-quarter oil and gas production to have increased by almost 4% on the year to the high end of the quarterly guidance range of 2.5 to 2.55 million barrels of oil equivalent per day (boe/d).

TotalEnergies’ commodity price sensitivity analysis for 2025 revealed that in a $70- $80 per barrel Brent environment, every drop in oil prices by $10 per barrel is estimated to reduce adjusted net operating income by $2.3 billion and cash flow from operations by $2.8 billion.

Some supermajors have flagged first-quarter weaknesses at certain divisions due to the specificity of their portfolios. The real stress test will be in the summer, when the world’s top oil firms will report earnings for the second quarter amid significantly lower oil prices and weakened economic and oil demand growth estimates.

By Tsvetana Paraskova for Oilprice.com

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