BP Halts Buybacks Amid Oil Price Pressure

• BP's Q4 underlying replacement cost profit of $1.54 billion matched expectations, but full-year profit of $7.49 billion missed the $7.58 billion consensus estimate
• The buyback suspension follows similar moves by rivals Equinor and Shell, both of which reported weaker earnings due to lower crude prices and oversupply concerns
• Oil prices reached their lowest levels since the Covid-19 pandemic in 2024, putting pressure on Big Oil's shareholder returns and profitability

BP Suspends Buybacks as Oil Price Weakness Pressures Sector

British oil major BP reported Q4 2025 underlying replacement cost profit of $1.54 billion, meeting analyst expectations. However, full-year 2025 net profit reached $7.49 billion, missing the $7.58 billion consensus and declining from nearly $9 billion in 2024.

Key Development: BP announced a suspension of share buybacks, marking a significant shift in capital allocation strategy amid sustained pressure on crude prices. This decision comes as oil prices recently fell below key levels for the first time in nearly five years.

Sector-Wide Challenges: The energy sector faces headwinds from oversupply concerns and weakened crude prices. BP's European rivals are experiencing similar difficulties:

• Equinor reported weaker quarterly earnings last week and announced plans to reduce its buyback program
• Shell also posted disappointing results, though it maintained its buyback commitment at $3 billion or more for the 17th consecutive quarter

Market Context: Oil prices have reached their lowest levels since the COVID-19 pandemic, creating pressure on Big Oil's ability to maintain shareholder returns. The combination of oversupply and price weakness is forcing energy companies to reassess capital allocation priorities.

Implications: BP's buyback suspension signals deteriorating conditions in the oil sector and may indicate further belt-tightening across the industry. Investors should monitor whether other majors follow suit in scaling back shareholder returns. The suspension could pressure BP's share price and raise concerns about the sustainability of dividends if commodity price weakness persists.