By Dmitry Zhdannikov

LONDON – BP (NYSE :)’s third quarter trading result for 2021 was at least $500M, according to two sources who have knowledge about the company’s results. The trading team profited from a global gas crisis which left both consumers and businesses smarter.

As the world economy rebounded from the pandemic, natural gas prices and electricity prices rose to new heights in Europe and Asia during August. Energy consumption was growing faster than supply.

A low gas stock after a cold winter, hot summer and poor renewables output all contributed to this rally.

Spain protested the rise in power bills and European governments felt pressured to provide solutions that would protect their citizens and stabilize markets. European Union https://www.reuters.com/article/eu-energy-idAFL1N2RM0FT countries failed to agree on a bloc-wide response on Tuesday.

China has implemented measures to boost coal output and improve power markets so that homes can be heated in winter.

Sources say that BP made its gas trading results public at an internal conference with employees earlier in the month. They asked not to be identified because they aren’t authorized to talk to the media. BP refused to comment on this story.

Customers in Europe and Asia were quick to rush to buy Liquefied Natural Gas from the United States to address shortages. It was an improvement on the situation that existed two years back when LNG producers had to contend with a worldwide glut.

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BP’s impressive gas trading results will likely give an indication as to how other international energy companies may benefit from the global crisis.

BP is less successful in trading LNG and natural gas than some of its competition, such as Shell (LON;) and Equinor. However, this could lead to even larger profits.

This week, Equinor, Shell and BP will release their results.

In their quarterly earnings, energy companies don’t usually disclose information on trading profits or losses. They often only say whether trading contributed positively to overall financial results.

BP and Shell rely on trading cashflow to help them transition from a business model that is more dependent on fossil fuels.

As they invest more in renewable and power markets with lower margins than those of oil and natural gas, trading is essential to ensure profit.

BP’s trading arm https://www.reuters.com/article/us-bp-trading-exclusive-idUSKBN2B30GK made nearly $4 billion in 2020 in profits, almost equalling the record trading profit in 2019.

Shell has stated that it has stopped producing oil or gas, but the company said they would cut their oil and gasoline output. Both companies claim that they’re expanding their trading and still earn billions of dollar a year by moving oil and natural gas around the world.

Although BP is planning to grow power and renewables trading in the future, these markets are tightly regulated and will not be able to generate as much profit margins for oil and gas.

The bulk of BP’s profits last year were made in oil. After the global lockdowns had an impact on demand for fuel, oil price fell. But then it rebounded and has continued to rise through 2021, bringing oil prices back to their highs since 2014.

The biggest trade in 2020 was oil storage. This allowed you to buy low-priced oil and then sell it when the market recovers.

Due to market disruptions that caused the Chinese power crisis and tight European gas supplies, this year has seen an equal strong performance.

Sources claim that BP already made close to $500million in the first quarter 2021 trading after a Texas deep freeze sent gas prices soaring.