BP reports biggest ever annual loss

» BP has reported its biggestever annual loss as plunging oil prices and demand amid the pandemic sent it tumbling into the red by 18.1 billion US dollars (£13.2 billion).

The oil giant’s record replacement cost loss compares with profits of 3.5 billion US dollars (£2.6 billion) in 2019 and comes after last year’s oil price collapse forced it to make massive write-offs.

Shares in the FTSE 100 stalwart sank 3 per cent as it warned global demand will remain under pressure throughout the first quarter due to coronavirus restrictions.

It is expecting a 20 per cent drop in year-on-year fuel demand in the first three months of 2021, worsening from the 11% drop at the end of last year.

This overshadowed BP’s more optimistic outlook for 2021, with the group confirming oil prices have risen since the end of October, helped by the rollout of the coronavirus vaccine, with demand also expected to bounce back this year.

On an underlying level, the group sunk to a 5.7 billion US dollar (£4.2 billion) replacement cost loss – its first for a decade on that basis since the losses seen in the wake of the Deepwater Horizon explosion and oil spill in 2010.

They also compare with underlying replacement cost profits of 10 billion US dollars (£7.3 billion) in 2019 and come despite a bounce-back in the second half of the year as oil prices started to recover.

Chief executive Bernard Looney said: “2020 will forever be remembered for the pain and sadness caused by Covid-19. Lives were lost, livelihoods destroyed.

“Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margins.”