BP shares moved higher on Wednesday, gaining 1.18% to 505.43p as crude oil prices hovered near $90 a barrel amid rising geopolitical tensions linked to the Iran conflict. The move reflects renewed investor attention on energy stocks as volatility returns to global oil markets and traders reassess supply risks tied to the Middle East.
The London-listed energy giant has become one of the key stocks to watch as oil prices swing sharply. Only weeks ago, the market was discussing the possibility of crude sliding significantly due to softer demand forecasts. Instead, escalating tensions around the Strait of Hormuz and uncertainty surrounding the Iran situation triggered a dramatic reversal in sentiment, pushing oil prices sharply higher.
Oil markets have experienced dramatic swings in recent days. Brent crude was trading below $70 a barrel just a month ago but surged as high as $119 earlier this week before retreating toward the $88-$90 range. The sharp move reflects how quickly geopolitical developments surrounding Iran and shipping through the Strait of Hormuz can reshape expectations for global oil supply.
For BP, the shift in oil market expectations immediately translated into stronger investor interest. Oil majors typically benefit when crude prices rise because higher prices can increase upstream revenues and improve cash flow expectations. That relationship between oil prices and energy stocks remains one of the strongest correlations in global markets.
Oil volatility drives energy sector momentum
The latest gains in BP shares come during a week of extreme swings in the oil market. Brent crude surged earlier in the week before pulling back, leaving prices still elevated compared with recent levels. Markets are attempting to price in the possibility of supply disruptions if tensions escalate further in the Middle East. Investors closely track movements in global oil prices and commodities markets to gauge the next move in energy stocks.
The Strait of Hormuz remains one of the most strategically important shipping routes in the global energy system. A large portion of the world’s oil supply moves through this narrow channel connecting the Persian Gulf to international markets. Any perceived threat to the flow of oil through this route immediately increases risk premiums in crude prices.
As oil climbed toward $90, investors began rotating back into energy companies such as BP. Integrated oil majors often act as indirect plays on crude prices, meaning that traders expecting higher oil prices frequently buy shares of major producers. That dynamic has helped push BP stock higher today.
The company already occupies a major position within the FTSE 100 and remains one of the most closely followed dividend-paying stocks in the UK market. When oil prices strengthen, BP’s cash generation potential becomes more attractive to investors seeking both income and exposure to commodity cycles.
Some analysts believe oil prices could rise much further if geopolitical tensions escalate. In a worst-case scenario involving major supply disruption, crude prices could potentially climb toward $150 or even $200 per barrel.
Political pressure on fuel prices grows
Despite the positive reaction in the stock market, the broader environment surrounding oil companies remains complicated. UK Chancellor Rachel Reeves has criticized fuel retailers over what she described as excessive petrol prices at some stations. The government has warned that it will not tolerate what it views as price gouging during periods of market turmoil.
Government data from the UK’s Fuel Finder database shows a wide gap in petrol prices across the country. Some stations have been charging close to £1.80 per litre for petrol, while others have been selling fuel for around £1.27 per litre.
According to the database, roughly 20 BP-branded motorway petrol stations were charging about £1.769 per litre earlier this week. Motorway forecourts typically charge more because of higher operating costs and 24-hour services, but the price difference has drawn criticism from consumer groups.
Campaign group FairFuelUK accused BP of being among the “main culprits” behind opportunistic pricing, arguing that petrol prices often rise quickly when oil increases but fall much more slowly when crude prices decline.
Energy companies have long faced this balancing act. While rising oil prices typically boost profits, they also tend to increase political pressure and public frustration as consumers pay more at the pump. That dynamic often shapes how governments approach energy policy during periods of high crude prices.
For investors, the key question is whether political rhetoric will translate into regulatory changes or simply remain part of the broader public debate surrounding fuel costs. At the moment, markets appear more focused on oil supply risks than on potential policy intervention.
Petrol and diesel prices rising
Official figures show petrol prices have risen by about 3.5p over the past week to an average of 135.67p per litre, marking the steepest weekly increase since August 2022 following Russia’s invasion of Ukraine.
Diesel prices have climbed even faster, rising by 6.9p to 149.01p per litre in the week to Monday. That is the highest level recorded since July 2024.
The jump in fuel prices has added pressure on households and businesses, while also strengthening the debate over whether the government should intervene further if oil remains elevated.
BP’s broader financial picture
The recent rise in BP shares also comes as investors continue evaluating the company’s longer-term strategy. The group has been navigating a complicated transition period involving leadership changes, debt reduction efforts, and adjustments to its approach toward renewable energy investments.
BP reported underlying profit of around $1.5 billion in its most recent quarterly results, an improvement compared with the previous year but still below earlier earnings peaks seen during stronger oil market conditions. Management also paused its share buyback program, signaling a greater focus on strengthening the company’s balance sheet.
The company also carries a sizeable debt load estimated at around $24 billion. In its latest results BP paused its share buyback programme, which had previously been running at roughly $750 million per quarter as management focused on strengthening the balance sheet.
Those decisions have produced mixed reactions among investors. Some shareholders welcomed the emphasis on financial discipline, while others were disappointed that capital returns slowed just as energy stocks were regaining momentum.
Leadership uncertainty has also remained part of the investment story. BP has faced questions over strategic consistency after management changes and its evolving stance on the balance between traditional oil production and renewable energy investment.
At the same time, BP continues to offer an attractive dividend yield compared with many other large companies in the FTSE 100. Investors can review financial updates and strategic announcements directly on BP’s official investor relations page.
BP lags rival Shell
Despite the latest rise, BP’s recent share performance has lagged behind rival Shell. BP shares have gained about 6.5% over the past month, while Shell has climbed nearly 13%, suggesting investors currently see Shell as the stronger performer among Europe’s major oil companies.
That weaker relative performance reflects concerns over BP’s balance sheet, strategy shifts and slower investor confidence recovery, even as higher oil prices offer short-term support to the stock.
Oil prices remain the biggest driver
Looking ahead, the direction of BP shares is likely to depend heavily on the next move in oil prices. If crude continues climbing toward or above $100 per barrel, energy companies could see another wave of buying as investors increase exposure to the sector. On the other hand, any rapid cooling in geopolitical tensions could quickly remove the risk premium currently supporting oil.
Oil markets are notoriously sensitive to geopolitical developments. Headlines about negotiations, ceasefire discussions, or shipping security measures can cause immediate price swings. Because BP’s earnings remain closely tied to commodity prices, those same movements often ripple directly into its share price.
That volatility creates both opportunities and risks for investors. While higher oil prices can boost energy stocks, sudden reversals in crude often trigger equally sharp declines in oil company shares.
For now, BP’s gain of 1.18% to 505.43p highlights how quickly sentiment can shift when oil markets become unstable. Investors will be watching closely to see whether the latest rally in crude marks the beginning of a longer uptrend or simply another short-term spike driven by conflict headlines.
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