BP PLC shares fell 0.6% to 475.2 pence during early London trading on Monday, reflecting a broader decline in oil markets. The move trimmed the energy giant's market capitalization to approximately £73 billion.
Brent crude futures dropped 1.2% to $67.21 per barrel, while U.S. West Texas Intermediate crude slid 1.3% to $62.73. The retreat followed news that the United States and Iran agreed to extend indirect negotiations regarding Tehran's nuclear program, alleviating immediate fears of supply disruptions in the Middle East.
All eyes are now on BP's full-year financial results, scheduled for release on February 10. Investors are particularly focused on the company's capital allocation plans, including potential share buybacks and dividends, especially if oil prices remain subdued. The results will also provide insight into the strategic path forward under interim CEO Carol Howle, with Meg O'Neill set to assume the role in April.
The company previously flagged significant headwinds in a January trading update, noting an expected $4 to $5 billion in fourth-quarter impairments, primarily linked to its low-carbon energy businesses. It also cited weaker oil trading and declining prices as factors likely to pressure earnings.
Activist investor pressure is mounting. A coalition including ACCR and several pension funds has submitted a shareholder resolution demanding greater transparency on project economics, cost overruns, and delays. This proposal is expected to be discussed at BP's annual general meeting in April or May.
Meanwhile, a potential labor dispute looms at BP's Whiting refinery in Indiana, where union officials have indicated the company does not intend to adhere to the industry's national bargaining agreement, raising the possibility of a strike or lockout.
Analysts suggest the upcoming earnings report is critical for investor sentiment. "Management appears to be clearing the decks with these impairments," noted RBC analyst Biraj Borkhataria, adding that buybacks could be vulnerable if the macroeconomic environment remains challenging. The market will scrutinize any signals on debt reduction and the strategic vision for navigating the current energy transition.
