BP to suspend buyback. The money is needed to strengthen the balance sheet amid cheap oil

British oil giant BP will suspend its share buyback program to fully channel excess cash flow "to accelerate the strengthening" of the company's balance sheet, CNBC reports . This is a signal of pressure from low oil prices, the channel said.

BP's fourth-quarter report showed that its underlying profit, calculated using a replacement cost method that smooths out the impact of fluctuations in oil and gas prices, rose 31% year over year to $1.54 billion, matching the consensus of analysts compiled by LSEG, CNBC noted. The company's full-year 2025 profit fell 17% to $7.49 billion, falling short of expectations.

"We have made progress in all four of our key areas - growing cash flow and profitability, reducing costs and strengthening the balance sheet - but we recognize that there is still much work to do, and we are clear about the urgency of getting things done," BP's acting CEO Carol Houle acknowledged.

The results were released at a challenging time for the European oil and gas sector. Last year, oil prices posted their biggest annual drop since the coronavirus pandemic, partly due to concerns about oversupply, CNBC points out. Brent futures are now trading below the $70 per barrel mark, while North American WTI exchange-traded contracts cost less than $65.

BP's competitors Equinor and Shell also reported underwhelming quarterly results last week, citing, among other things, lower oil prices. Equinor, meanwhile, announced it would cut its share repurchase program this year to $1.5 billion, down from $5 billion a year earlier, and cut investments in renewable and low-emission energy projects. Shell, in turn, kept the buyback volume at $3.5 billion, CNBC recalls.

This article was AI-translated and verified by a human editor