The Iran war, which erupted on 28 February 2026, has reshaped energy markets and financial trading in Europe, delivering a sharp boost to two of Britain's largest companies. BP's first-quarter profits more than doubled, while Barclays saw its investment bank post record income, though loan losses tempered the overall picture.
BP: Oil Trading Boom Lifts Profits
BP reported that underlying replacement cost profit surged to $3.2 billion (€2.7bn) in the first three months of 2026, up from $1.5 billion in the previous quarter. The company attributed the jump to “an exceptional oil trading contribution and stronger midstream performance,” as energy market turmoil intensified following the outbreak of hostilities.
Brent crude prices climbed from just above $70 per barrel in early February to over $120 per barrel by late March, before settling around $110 per barrel in April. This volatility created lucrative opportunities for BP's trading desk, which posted strong profits during the period.
Upstream production remained steady at approximately 2.3 million barrels of oil equivalent per day. BP also highlighted its exposure to the Middle East, with about 411,000 barrels of oil equivalent per day coming from operations in Abu Dhabi, Oman, and Iraq. The company's share price rose more than 2% in afternoon trading in Europe.
The surge in oil prices has broader implications for the continent. European airlines have been forced to ground flights as jet fuel costs skyrocket, a trend that may persist if the conflict continues. European Airlines Ground Flights as Jet Fuel Costs Surge.
Barclays: Trading Gains Offset by Loan Losses
Barclays reported steady first-quarter growth, with total income rising 6% to £8.2bn (€9.5bn) and profit before tax increasing to £2.8bn (€3.2bn), up from £2.7bn (€3.1bn) a year earlier. The bank's investment bank income exceeded £4bn (€4.6bn) for the first time in a single quarter, driven by strong trading and advisory activity.
Will Howlett, financial analyst at Quilter Cheviot, noted that equities trading grew 16% year on year (23% in US dollar terms) amid heightened volatility since the Iran war began. Investment banking fees also rose 17%.
However, Barclays' return on tangible equity (RoTE) slipped to 13.5% from 14.0% last year, as rising loan losses weighed on performance. The bank booked a £228m (€264m) charge linked to the collapse of UK mortgage lender Market Financial Solutions (MFS). Chief executive C.S. Venkatakrishnan said the bank would scale back complex lending and reduce exposure to highly leveraged companies following the MFS hit.
Despite the loan concerns, Barclays announced a £500m (€580m) share buyback, bringing total buybacks this year to £1.5bn (€1.74bn). The bank reiterated its financial targets, citing a strong capital position. Russ Mould, investment director at AJ Bell, described the quarter as “another bumper performance” for Barclays' investment bank, potentially marking its strongest quarterly profit this decade.
The conflict's ripple effects extend beyond energy and banking. European policymakers are grappling with the economic fallout, while debates over strategic autonomy gain urgency. Europe's AI Dilemma: Can the EU Keep Its Industrial Giants at Home? explores similar tensions in technology.
