The FTSE 100’s New Year rally stalled today as London’s energy heavyweights were hit by a sharp correction in crude prices.
Biofuel Expansion: The Etlas Joint Venture
BP has taken a significant step in its sustainable aviation fuel (SAF) strategy, announcing a 50:50 joint venture with US agriculture giant Corteva Inc. The new business, named Etlas, aims to produce one million tonnes of biofuel feedstock per year by the mid-2030s.
According to a report by Renewables Now, the venture will leverage Corteva’s seed technology and BP’s refining infrastructure to meet a global SAF demand that is expected to reach 10 million tonnes by 2030. Philipp Schoelzel, BP’s VP of biofuels, described the partnership as a “capital light” model designed to deliver attractive returns in a growing market.
Market Reaction: Oil Slumps Below $60
The announcement was overshadowed by broader market volatility. Shares in BP fell 3.5% to 416.65p while Shell dipped nearly 4%, dragging the FTSE 100 down 0.6%. This shift followed reports from City AM that the Trump administration has moved to import $2 billion of Venezuelan crude, a geopolitical shift that pushed Brent crude below the $60 mark.
IG’s chief market analyst, Chris Beauchamp, told City AM that the focus has shifted from record equity highs to a “slump in oil prices” that could push the market to new lows. Analysts at Mizuho Bank further noted that US control over Venezuelan supply could fundamentally reshape energy flows to China.
Leadership Transition and Strategy Shifts
The volatility comes as BP prepares for a major leadership change. Investors Chronicle reports that Meg O’Neill, formerly of Woodside Energy, will officially succeed Murray Auchincloss as CEO on April 1.
The transition follows BP’s $10.1 billion sale of its Castrol lubricants business, a move intended to reduce debt but one that has drawn skepticism from analysts. RBC Capital Markets’ Biraj Borkhataria suggested that selling a “high-cash-generative” asset like Castrol could leave BP more exposed to the commodity price swings witnessed in today’s session.
This report is part of our Daily Market Newswire, a curated selection of global business news and key market events. To keep our readers informed, we gather and organise findings, quotes, and data from established financial outlets and primary sources. You will find specific credits and direct links to the original reporting throughout the text. This section is separate from our independent news coverage.