British energy giant BP warned Friday that its third-quarter profits are set to be hit by weak oil sales and refining margins, amid stalling global crude demand.

The trading update follows a similar warning from its rival Shell of a drop in its own margins after oil prices fell on concerns over Chinese demand and the prospect of higher crude production in 2025.

BP's refining margins are set to drop between $400 million to $600 million lower than the previous quarter and oil trading is expected to be "weak", the company said in a statement ahead of its results on October 29.

The price of a barrel of Brent North Sea crude, the international benchmark oil contract, averaged $80.34 in the third quarter, down nearly $5 from the previous quarter, it noted in the statement.

Global oil demand has been weighed down in recent months by an economic slowdown in China, the world's largest import of crude.

However, prices soared in early October on escalating tensions in the Middle East, particularly between Israel and Iran, which drove concerns about supply from the region.

Brent went above $80 per barrel on Monday for the first time since late August, as investors feared Israel's response to a missile attack by Iran.

Oil prices have since eased again after Israel came under international pressure not to strike Iranian oil installations and concerns around Chinese demand reignited.

BP said its net debt is forecast to increase over the period, driven by weaker refining margins and by the company delaying recording around $1 billion of divestment proceeds until the fourth quarter.

In the first half of 2024, BP's profits slumped 79 percent to $2.13 billion compared with net earnings of $10 billion in the first six months of the previous year.