BP gets a second chance to cut debt as high oil prices boost outlook, says RBC Capital Markets.

RBC Capital Markets upgraded BP to outperform, highlighting a new opportunity for the oil giant to reduce its debt amid elevated oil and gas prices. The broker expects BP's net debt-to-cash flow ratio to drop from 2.0 in 2025 to 1.0 by 2027 if Brent crude stays around $80 per barrel. RBC cautions BP's new CEO Meg O’Neill to prioritize debt reduction over early shareholder payouts to avoid medium-term risks. Positive exploration results, especially in Brazil, and potential asset sales in the Gulf of Mexico could further strengthen BP's financial position and investor confidence.