British energy titan BP was forced to scale back its share buyback programme, after President Donald Trump's capricious tariff strategies sent oil prices into a nosedive.
In a cautious move, BP pared its buybacks down to $750m (£559m), a substantial drop from the $1.75bn allocated in the previous quarter, as reported by .
The company's shares took an approximate four per cent hit in early Tuesday trading.
Trump's aggressive tariffs pushed the price of Brent crude under the critical $70 mark—a crucial benchmark for BP's financial planning.
This disappointing performance unfolded just before Trump's so-called 'Liberation Day' on 2nd April, when he unloaded expansive tariffs affecting all trading partners.
Despite being headquartered in London, BP wasn't shielded from adversity, as cash flow from operations dwindled to the feeblest since Q4 2020, back when oil hovered below $40 a barrel.
Commensurate with expectations, FTSE 100-listed BP reported an underlying replacement-cost profit of $1.38bn, lagging behind the $1.53bn analysts had forecast.
A spike in net debt by $4bn over the last quarter compounded the situation.
Adding further woe, net income plummeted, nearly halving year-on-year to $1.38bn in the initial three months, missing the mark of average analyst projections at $1.64bn.
Market analyst Mark Crouch at eToro weighed in: "BP's first-quarter earnings update was, as expected, weak and underwhelming."
Yet, he tempered his critique, adding: "The º£½ÇÊÓƵ supermajor once again missed profit targets for the quarter, however, there does appear to be a silver lining."
BP facing scrutiny from activist investor Elliott
BP is under the microscope of activist investor Elliott, which has been pushing the oil firm to ramp up spending cuts and offload more assets. Elliott has set its sights on a free cash flow target of $20bn by 2027, a figure that overshadows BP's current goal by a hefty 40%.
Earlier this month, BP's chair Hedge Lund conceded that his departure was "inevitable" following the tussle with Elliott. On 4 April, BP revealed that Lund had informed the board of his intention to step down, likely sometime in 2026.
This development comes in the wake of BP scrapping an ambitious plan hatched in 2020 to transform itself into a green energy titan.
The decision sparked controversy, with nearly a quarter of shareholders voting against Lund's re-election at the company's annual general meeting, as the dispute over the axing of climate goals raged on.
The plot thickened when news broke that Elliott had snapped up a stake close to five per cent in BP and was demanding sweeping changes. Crouch commented: "With Elliott Management now on board, falling oil prices might prove to be a blessing in disguise, exposing the company's underlying vulnerabilities and reinforcing the critical role fossil fuels still play in its long-term future."
Reflecting on the first-quarter results, BP's chief financial officer Kate Thomson said: "In the first quarter, we delivered resilient financial results and are in action to improve the performance of BP."
"Underlying RC profit grew quarter-on-quarter to $1.4bn and we have made good progress on our plans to deliver on our structural cost reduction target."
"Our financial frame provides us with flexibility through cycle. We continue to optimize investment plans and now expect 2025 capital expenditure of around $14.5 billion."
