How BP (BP p.l.c.) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a global energy leader like BP makes money is essential for investors and anyone interested in the business of energy and integrated oil & gas. In this post, we break down BP's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick BP Overview

BP operates as a vertically integrated energy company, spanning oil & gas exploration, production, refining, marketing, and increasingly, low-carbon energy solutions. Revenue comes primarily from the sale of refined petroleum products, natural gas, and emerging low-carbon energy offerings. BP’s business segments include Customers & Products, Gas & Low Carbon Energy, Oil Production & Operations, and other product lines.

Revenue Breakdown

• Total Revenue (Q2 2025): $47.2B (−0.3% YoY)
  • Customers & Products Revenue: $37.5B (79.5% of total, −8.7% YoY)
  • Gas & Low Carbon Energy Revenue: $8.8B (18.7% of total, +62.5% YoY)
  • Other Revenue by Product 1: $0.55B (1.2% of total)
  • Oil Production & Operations Revenue: $0.24B (0.5% of total, −65.3% YoY)
  • Other: $0.05B
• Growth is powered by the rapid expansion of Gas & Low Carbon Energy, offsetting declines in traditional oil production and product sales.

Gross Profit and Margins

• Gross Profit: $8.5B (18.0% gross margin)
  • Cost of Revenue: $38.7B (−3.7% YoY)
  • BP maintains moderate margins due to its scale, diversified energy portfolio, and operational efficiencies in refining and distribution.
• Most costs come from feedstock purchases, refining operations, and logistics.

Operating Income and Expenses

• Operating Income: $5.9B (−16.2% YoY, 12.5% margin)
• Operating Expenses: $2.6B (−40.4% YoY)
  • R&D: Not separately disclosed for Q2 2025
  • SG&A: $2.6B (−37.8% YoY, 5.5% of revenue) — covers corporate overhead, sales, and administrative functions
  • BP continues to control costs and invest in operational efficiency, while expanding its low-carbon energy footprint.

Net Income

• Pre-Tax Income: $2.9B (+132.6% YoY, 6.2% margin)
• Income Tax: $0.97B (33.1% effective tax rate)
• Net Income: $1.65B (flat YoY, 3.5% net margin)
• BP converts a moderate portion of sales into profit, reflecting the capital intensity and volatility of the energy sector, but benefits from scale and efficiency.

What Drives BP's Money Machine?

• Customers & Products: 79.5% of revenue comes from refined product sales and retail energy distribution.
• Gas & Low Carbon Energy: The fastest-growing segment (+62.5% YoY), now nearly 19% of revenue, driven by global demand for cleaner energy.
• Strategic Investments: BP is investing heavily in renewables, hydrogen, and carbon capture, positioning for long-term growth.
• Future Growth Areas: Low-carbon energy and new mobility solutions are expanding rapidly, though not yet consistently profitable.

Visualizing BP's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and cost of revenue) taking the largest chunk.
• Even after significant costs and investments, 3.5% of revenue drops to the bottom line.

Key Takeaways

• BP's money comes overwhelmingly from Customers & Products (refined petroleum sales and retail energy)
• Moderate gross and net margins illustrate the challenges and scale advantages of BP’s integrated energy model
• Heavy investment in low-carbon energy, balanced by aggressive cost control in SG&A and operations
• Ongoing growth is driven by expansion in Gas & Low Carbon Energy, despite headwinds in traditional oil production

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FAQ About BP's Income Statement

1. What is the main source of BP's revenue in 2025?

BP generates over 79% of its revenue from Customers & Products, primarily the sale of refined petroleum products and retail energy. Other significant sources include Gas & Low Carbon Energy 19% and smaller contributions from oil production and other products.

2. How profitable is BP in Q2 2025?

BP reported net income of $1.65B in Q2 2025, with a net margin of approximately 3.5%, reflecting moderate profitability driven by scale, operational efficiency, and growth in low-carbon energy.

3. What are the largest expense categories for BP?

The biggest expenses on BP's income statement are cost of revenue $38.7B and operating expenses, particularly SG&A ($2.6B in Q2 2025). R&D is not separately disclosed for this quarter, but BP continues to invest in innovation and efficiency.

4. Why does Oil Production & Operations operate at a loss?

Oil Production & Operations, despite generating $235M in revenue, posted an operating loss in Q2 2025 due to aggressive investment in asset maintenance and transition to lower-carbon operations. BP believes these investments will drive long-term growth—even if the division is unprofitable today.

5. How does BP's effective tax rate compare to previous years?

BP's effective tax rate in Q2 2025 was 33.1%, consistent with prior years. This moderate rate is primarily due to international structuring and tax benefits from operational investments.