BP Urged to Overhaul Strategy Amid Profit Dip and Climate Backlash
London, UK – In a pivotal moment for one of the world's largest energy firms, BP is bracing for a wave of shareholder scrutiny as it unveils its full-year 2025 results this week. The British oil major, long synonymous with the fossil fuel industry, is expected to report profits of around $7.5 billion (£5.5 billion), a notable decline from the nearly $9 billion recorded in 2024. This downturn comes against the backdrop of a third straight year of falling global oil prices, the sharpest drop since the COVID-19 pandemic ravaged markets.
Profit Slump Signals Deeper Industry Challenges
The anticipated earnings dip is largely attributed to crude oil prices dipping below $60 per barrel for the first time in nearly five years during the fourth quarter of 2025. Analysts from City firms have been unanimous in their forecasts, pointing to a broader softening in the energy sector as demand wavers under the weight of economic uncertainties and accelerating shifts toward cleaner alternatives.
BP's trajectory mirrors that of its peers, including Shell and ExxonMobil, which have also grappled with volatile commodity prices. However, BP's challenges are amplified by its recent strategic pivots. After a bold foray into renewables that saw the company invest heavily in wind, solar, and hydrogen projects, BP reversed course in 2024, recommitting to oil and gas to shore up its balance sheet. This U-turn, while boosting short-term returns, has reignited debates over the company's long-term viability in a decarbonizing world.
Key Financial Highlights and Market Reactions
According to projections, BP's underlying replacement cost profit – a key metric for oil majors – will reflect the toll of lower refining margins and upstream production costs. Despite the headwinds, the company launched seven new oil and gas projects in 2025, five of which came online ahead of schedule. This operational efficiency has helped BP's share price outperform European rivals by 4.4% over the past six months, adding an estimated $4 billion in equity value, per Citi analysts.
Yet, this rebound is fragile. Citi's investor note highlights potential upside from rival Shell's exploratory successes off Brazil's coast, which could unlock $15-20 billion in value. For BP, similar windfalls remain elusive, leaving investors hungry for a clearer path forward.
Shareholder Activists Ramp Up Pressure for Climate Accountability
As BP navigates these financial straits, activist investors are not holding back. A coalition led by the Australasian Centre for Corporate Responsibility (ACCR), which manages assets for major pension funds like Australia's Nest, has filed a resolution demanding BP outline controls on future oil and gas spending. This move underscores growing concerns in the investor community, particularly from regions like Australia, where superannuation funds are increasingly prioritizing ESG (Environmental, Social, and Governance) criteria.
Dutch group Follow This, a vocal critic of Big Oil's climate stance, has echoed these calls with its own resolution ahead of BP's April annual general meeting. They urge the company to disclose strategies for generating shareholder value in scenarios of declining fossil fuel demand – a scenario the International Energy Agency (IEA) predicts could materialize by 2030 in most global outlooks.
Mark van Baal, founder of Follow This, didn't mince words: "The new chief executive needs to come up with a strategy to address the world’s declining oil and gas markets." He criticized BP's "shaky" strategy shifts, arguing that the company's earlier green ambitions weren't the problem – rather, it was abandoning them too soon. Green groups amplify this narrative, warning that new fossil fuel projects will strand assets as electric vehicles and renewable grids erode oil demand.
Incoming CEO Meg O’Neill's Daunting Task
Enter Meg O’Neill, set to assume the role of BP's chief executive in April 2026. With a background in upstream operations from her time at Occidental Petroleum, O’Neill inherits a company at a crossroads. Investors expect her to articulate a vision that balances immediate profitability with the imperatives of the energy transition. Will she double down on hydrocarbons, or revive BP's net-zero pledges?
BP's recent history offers cautionary tales. Its 2020 strategy aimed for 40% emissions cuts by 2030 and a pivot to 50% renewables by mid-century. But by 2023, faced with underperforming green investments and shareholder revolts, BP scaled back, targeting just 20-30% renewables. This pragmatism paid dividends in 2024 but has alienated climate-focused stakeholders.
Broader Implications for Australia's Energy Landscape
For Australian audiences, BP's saga resonates deeply. As a key player in the Asia-Pacific LNG market, BP supplies gas to the region's growing economies, including Australia. Yet, with local activism mirroring global trends – think ACCR's influence – Australian investors are pushing energy firms toward sustainability. The IEA's warnings of peaking oil demand align with Australia's own net-zero commitments by 2050, potentially disrupting exports and jobs in the resources sector.
Moreover, BP's turbulence highlights risks for diversified portfolios. Pension funds like Nest, with billions under management, are divesting from high-carbon assets, signaling a seismic shift. As electric vehicles proliferate – projected to comprise 60% of new car sales by 2030 – the writing is on the wall for unchecked fossil fuel expansion.
Outlook: Can BP Chart a Sustainable Course?
BP's upcoming results presentation will be more than numbers; it's a litmus test for its adaptability. If O’Neill can weave a narrative of resilient growth – perhaps blending carbon capture tech with selective green investments – she might quell the unrest. Analysts like those at Citi see "ingredients for a substantial change in narrative," but execution is key.
Ultimately, BP's story is emblematic of the global energy dilemma: how to bridge today's realities with tomorrow's imperatives. As shareholders converge in April, the world will watch whether BP emerges from turbulence stronger – or stuck in the past.
This article is based on analyst forecasts and public statements as of February 2026. Figures are projections and subject to confirmation in BP's official results.
