British oil giant BP said Tuesday that it rebounded into first-quarter net profit as oil prices recovered from a virus-driven slump.

Earnings after taxation hit $4.7 billion (3.9 billion euros) in the three months to the end of March, BP said in a results statement.

That contrasted sharply with a net loss of $4.4 billion in the same period last year when coronavirus had savaged oil demand and prices.

The company, whose performance was also boosted by a series of asset sales, added that it would begin share buybacks in the next quarter.

"With the acceleration of divestment proceeds, together with strong business performance and the recovery in the price environment, we generated strong cash flow and delivered on our net debt target around a year early," said chief executive Bernard Looney.

"We are commencing share buybacks in the second quarter which, alongside our resilient dividend, support the growth in distributions to shareholders."

BP's replacement cost profit -- a widely-watched measure stripping out exceptional items and changes in the value of oil inventories -- soared to $2.6 billion in the first quarter, up from $0.1 billion in the fourth quarter of last year.

"This result was driven by an exceptional gas marketing and trading performance, significantly higher oil prices and higher refining margins," BP added in the earnings release.

One year ago, crude oil prices had plunged into the abyss, ravaged by the global coronavirus pandemic and disagreement within crude-producing cartel OPEC.

In the first half of last year, crude futures had tanked as low as -$40.32 on April 20, 2020, as investors were caught between a lack of buyers and an inability to take delivery of barrels due to lack of available storage space.

However, twelve months on, prices have recovered and are rising, boosted by the global vaccination roll-out and brightening optimism over demand.

The pandemic and OPEC infighting hammered oil prices early last year, hitting BP's results
The pandemic and OPEC infighting hammered oil prices early last year, hitting BP's results AFP / Ben STANSALL

Oil has returned to its pre-pandemic price, hovering around $65 a barrel, with industry predictions it will rise above $80 in the coming months.

"The oil market is set to continue its rebalancing process," BP added on Tuesday.

"Oil demand is expected to recover in 2021 due to strong growth in US and China and as the distribution of vaccinations gains momentum and lockdown restrictions are gradually lifted."

"OPEC+ behaviour is a key factor in oil prices and market rebalancing," it added.

The results were published on the eve of an output gathering of OPEC and its allies.

London-listed BP had suffered a vast $20.3-billion net loss last year, when the pandemic shuttered swathes of the global economy and slammed energy demand.

Last year's poor performance was also driven by massive impairments and exploration write-offs in a tumultuous year for the energy industry.

BP nevertheless returned to profit in the fourth quarter of 2020, aided by the gradual reopening of economies.

Under Looney, who took over the reins at BP as the pandemic began taking hold in February last year, the group is looking to raise $25 billion from asset sales by 2025.