A BP gas station on September 15, 2022 in Farmingdale, New York, United States.
London CNN  — 

Shares of BP fell more than 5% Tuesday after the energy giant said it would return less cash to investors following a drop in first-quarter profit.

BP (BP) reported underlying profit of $5 billion for the first three months of the year. That’s down from $6.2 billion a year ago — after Russia’s invasion of Ukraine sent oil and gas prices soaring — but still almost double the $2.6 billion it reported for the first quarter of 2021.

The result reflected an “exceptional” performance from its gas marketing and trading arm and a “very strong oil trading” performance, BP said in a statement.

“This has been a quarter of strong performance and strategic delivery as we continue to focus on safe and reliable operations,” added CEO Bernard Looney.

Big oil companies’ earnings are coming off the record levels achieved last year, but they remain high by historical standards. Despite huge profits, the market’s reaction to BP’s earnings suggests oil firms could struggle to keep investors excited following last year’s eye-wateringly high returns.

BP (BP), Chevron (CVX), ExxonMobil, Shell and TotalEnergies (TOT) handed more than $100 billion to their investors in 2022 via share buybacks and dividend payments.

On Tuesday, BP announced a $1.75 billion share buyback for the first quarter, down $750 million from the same period last year. It left its quarterly dividend unchanged from the fourth quarter.

Notwithstanding Tuesday’s slide, BP’s shares are up more than 7% this year, helped by the company’s renewed investment drive into oil and gas — a move that has led it to water down some of its earlier climate commitments.

BP still plans to be a net-zero emissions business by 2050, but it has backed away from a target to slash oil and gas production 40% from 2019 levels by 2030. In February, it said 2030 output would now be around 25% lower.

Looking ahead, BP said it expects oil prices to “remain elevated,” following supply cuts by OPEC+ and strengthening demand from China. Gas prices in Europe and Asia would be supported by recovering Chinese demand, restocking of European storage capacity and coal-to-gas switching, it added.

BP’s earnings have reignited calls for higher taxation of energy companies. Governments in Europe imposed windfall taxes on oil company profits over the past year, using the proceeds to help households struggling with rising energy bills.

Keir Starmer, the leader of Britain’s opposition Labour Party, on Tuesday called for a “proper” windfall tax to freeze local property taxes and ease the cost-of-living crisis. “These are profits they didn’t expect to make,” he told the BBC.