The EPA said the ban was imposed because the company’s conduct during the Deepwater Horizon disaster showed a lack of integrity. The action, which doesn’t affect existing contracts, will stand until BP can demonstrate it meets business standards set by the government, the EPA said.
BP is one of the largest suppliers of fuel to the U.S. Department of Defense.
Shares in BP slumped as much as 2.9 percent to 418.7 pence in London trading after the announcement.
BP spokesman David Nicholas couldn’t immediately comment on the statement.