BP swings to highest annual profit in eight years

Oil giant BP has posted its highest annual profit in eight years amid mounting pressure on the sector as the cost-of-living crisis deepens (Andrew Milligan/PA)

Oil giant BP has posted its highest annual profit in eight years amid mounting pressure on the sector as the cost-of-living crisis deepens.

The group revealed it swung to a mammoth $12.8bn underlying replacement cost profit — its preferred measure — for 2021 from losses of $5.7bn the previous year.

It notched up $4.07bn of profits in the final three months alone, which was better than expected and up from just 115 million US dollars a year earlier.

BP also announced more cash returns for shareholders, with another $1.5bn of share buybacks before its first-quarter 2022 results and a dividend payout of 5.46 cents a share for the fourth quarter.

The group recovered from a torrid 2020, when the pandemic sent it slumping $18.1bn into the red on a statutory basis — its biggest ever annual loss.

Oil and gas prices have since rebounded as economies worldwide reopened following the early stages of the pandemic.

But the results also intensify pressure on oil firms as they reap mammoth profit hauls while households and businesses are struggling due to soaring inflation.