July 31 (UPI) -- BP CEO Bob Dudley said Tuesday there were factors ranging from Iranian sanctions to a shortage of U.S. pipelines that supported higher crude oil prices.
BP reported strong results for the second quarter, noting production apart from operations in Russia were up 1.4 percent from last year. The company reported a profit of $2.8 billion, four times higher than second quarter 2017.
"We continue to make steady progress against our strategy and plans, delivering another quarter of strong operational and financial performance," Dudley said in a statement.
For the first time since the third quarter of 2014, the British supermajor increased its dividend by 2.5 percent, or 10.25 cents per share.
The growth comes as crude oil prices continue their recovery from the early 2016 dip below $30 per barrel. Dudley at the height of the downturn gave the market a "lower for longer" mantra, though an effort steered by the Organization of Petroleum Exporting Countries to erase the glut of oil on the market has pushed the price of Brent, the global benchmark for the price of oil, back to about the $70 per barrel mark.
Shrugging off concerns about the impact of global trade tensions, Dudley said the outlook for global demand was positive given expectations of 3 percent growth in global gross domestic product this year and next.
On the price of oil, he said supply disruptions from Libya and Venezuela, the potential impact of U.S. sanctions on Iran and limited pipeline availability in the United States are all lingering supply-side concerns.
"These uncertainties could serve to maintain upward pressure on the oil price over the near term," he said.
The price for Brent crude oil averaged $74 per barrel during the second quarter, up 10 percent from the first quarter average. Brent was trading around $75 per barrel early Tuesday EDT.
Looking ahead to the third quarter, BP said it expected its production rates would be relatively unchanged from the second quarter, even after the company made its biggest investment in years with a billion-dollar spend on U.S. shale.
"It adds high-quality assets and over 4.6 billion barrels of oil equivalent of resources that repositions our existing Lower 48 business," Dudley said.
By 2021, the U.S. shale segment could contribute another $1 billion to exploration and production pre-tax cash flow to BP.
Further out, Dudley said he did not expect the price of oil to maintain its current level.
"We continue to plan for oil prices in the range of $50-$65 per barrel," he said.