BP Raises Dividend as War-Driven Crude Lifts Q2 Profits, but Output Falls
BP and ONGC posted sharply higher second-quarter earnings on elevated crude realizations, even as production volumes slid at both companies.
BP PLC on Tuesday (2026-08-04) raised its quarterly dividend four percent to 8.66 cents per share after reporting underlying replacement cost profit of $5.73 billion, or $36.92 per share, for the second quarter. The result marks a sharp acceleration from the $3.2 billion posted in Q1 2026, driven by higher liquid realizations including price lags and production mix benefits.2,4
For Meg O'Neill's first full quarter as chief executive, the profit jump came from both upstream and gas. BP's oil production and operations segment saw RC profit before interest and tax rise to $3.4 billion from $1.7 billion in Q1, while its gas and low carbon energy unit delivered $1.6 billion, up from $1.1 billion. The gas marketing and trading result was broadly flat quarter-on-quarter.4
The numbers reflect an earnings season shaped by the U.S.-Iran war, which has throttled Persian Gulf flows and kept crude elevated. ONGC more than doubled its quarterly profit, reporting net income of 170.34 billion rupees, or about $1.8 billion, for the quarter ended June, beating the 152.67 billion-rupee average estimate compiled by Bloomberg. Revenue jumped 45% from a year earlier to 464.60 billion rupees.3
ONGC earned 50.4% more on every barrel of crude it sold compared with a year earlier. Brent averaged nearly 50% above year-ago levels as the conflict tightened crude and fuel markets, and a weaker rupee added to the tailwind for the Indian state-controlled producer.3
The profit story masks a production problem common to both companies. ONGC's standalone oil and gas output fell 3.4% to 9.4 million metric tons of oil equivalent as aging fields declined and newer projects were slow to compensate. Earnings from gas produced at legacy fields rose just 5.4%, while newer deepwater acreage jumped 61.5%.3
BP shows the same trend. Production under its oil production and operations segment fell to 1.44 million barrels of oil equivalent a day in the April-June quarter from 1.54 MMboed in Q1, with gas comprising 3.93 million cubic feet per day, down from 4.12 MMcfd. Refining throughput also declined, to 1.47 MMbd from 1.53 MMbd.2
Price-driven profits and volume declines pulling in opposite directions leaves these earnings exposed if crude retreats. ICE Brent crude front-month was trading at $80.77 per barrel as of 2026-08-06 13:04 UTC, up 0.69% from its prior close, while the OPEC basket sat at $77.34 per barrel as of the same date.3 (LIVE PRICES)
India's exposure to any supply shock is acute. The country imports nearly 90% of the oil it consumes and about half its gas. Russian crude imports hit a record 2.8 million barrels per day in July, accounting for 55.5% of total imports, showing how the war has reshaped trade flows toward Moscow's barrels.3
The refining squeeze is showing up in BP's numbers too. BP's customers and products segment saw throughput decline quarter-on-quarter, and the company booked post-tax net impairments of $0.8 billion. Operating cash flow came in after a $1.0 billion working capital build, reflecting inventory holding losses and fair value accounting effects.4
BP also paid $1.1 billion in Gulf of America settlement liabilities during the quarter and redeemed a $2.9 billion perpetual hybrid bond. Net debt fell on strong cash generation, the company said, but the pace of capital returns will depend heavily on crude staying near current levels.4
Equinor set the tone for the season when it reported $4.84 billion in net income for Q2 on Wednesday (2026-07-22), up 267% year-on-year. Across the sector, record profits from higher prices are sitting alongside volumes heading in the wrong direction — a gap that widens the downside if the war premium in crude softens.1
For ONGC, the volume slide is the more persistent risk. Indian demand growth remains strong, and with Russian barrels supplying more than half of imports, any disruption to that flow would tighten an already strained market. For BP, O'Neill's second quarter at the helm will show whether Tuesday's (2026-08-04) dividend increase can be sustained as upstream output continues to shrink.3,2