BP and Shell both posted sharp profit gains this quarter, driven by the same Iran-war-driven surge in oil and gas prices. BP's turnaround under new leadership pushed its profit past estimates, while Shell posted its best quarter since 2022 by staying the course. Hedge funds have grown more bullish on both companies even as their strategies diverge.
BP's profit more than doubled to $5.73 billion, beating the $5.11 billion analysts expected, as the same Iran-war-driven surge in oil and gas prices lifted both major European energy companies. Shell posted adjusted earnings of $9.84 billion, topping the $8.92 billion estimate and marking its best quarter since 2022. The shared windfall already drew a public attack from President Trump on Exxon and Chevron over their profits.
BP leans into a turnaround
New CEO Meg O'Neill is pushing an aggressive turnaround at BP, and she has openly admitted the company has not delivered consistently in recent years. BP raised its dividend 4%. It also cut net debt to $22.25 billion from $25.3 billion, putting it on track to hit its long-term debt target early.
However, according to O'Neill, BP has "written off too much value", and its costs and liabilities are not resilient enough for a low-price environment. The company is still selling billions in assets, including its U.S. biogas business, its North Sea operations, and its Austrian retail unit, to fund the turnaround. The stock still fell about 2% on earnings day, even with the beat, as oil prices dropped on hopes of a U.S.-Iran deal.
Shell stays the course
Shell, by contrast, kept following the steady strategy it has run for years. Net debt at the company fell sharply to $41.75 billion from $52.6 billion. Shell also maintained its 19th consecutive buyback of at least $3 billion. Its integrated gas business grew profit 55% even while dealing with a plant outage.
Yet Shell's Pearl gas-to-liquids plant in Qatar has been offline since March after an attack damaged it, costing the company roughly 10% of its total production, with repairs expected to take about a year. Shell still trades at a discount to European rivals like TotalEnergies and Eni.
Hedge funds tilt toward BP
Insider Monkey's hedge fund database shows BP had 49 hedge fund holders as of Q1 2026, down from 51 the quarter before, though the dollar value hedge funds held rose from about $4.0 billion to $5.78 billion. Shell had 45 holders, up from 43, with the dollar value held rising from about $4.18 billion to $5.67 billion.
Source: Insider Monkey
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