BP’s trading division is said to have made almost $4bn (£2.8bn) last year as the oil major weathered the impact of the pandemic on oil demand.
The blue-chip giant’s trading profit was only just short of the record amount of slightly over $4bn it made in 2019, according to internal documents seen by Reuters.
Trading revenue has become a crucial source of income for majors such as BP and Shell as the Covid crisis battered the oil industry and they look to shift towards low-carbon energy.
Despite the bumper figures, though, BP posted a $20.3bn loss with writedowns and a $5.7bn loss without writedowns last year. It is the first time the company has been in the red for a decade.
BP, which does not publicly disclose its trading revenue, declined a Reuters request for comment.
BP and Shell are pinning their hopes on trading to help fund the transition to renewable energy as they reduce their reliance on fossil fuels.
One technique during the pandemic was to store oil during the downturn, buying it at lower prices and selling it later when the price recovered.
BP made roughly $1.7bn on this strategy alone in the second quarter, according to the report.
Earnings were modest but steady in the first and third quarters, while the company made only about $250m in the final three months of the year after betting on weak gas prices that then soared.
BP posted a replacement cost net loss of $18.1bn in 2020, compared to a $3.5bn profit in 2019, because of massive writedown due to low oil prices, according to the documents.
Without the writedowns, underlying replacement cost loss before tax was $5.7bn, most of which came from BP’s production division.