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Because the oil value hits $107 a barrel, traders might be casting envious appears to be like at BP (LSE: BP) shares. They appear primed to rise whereas many FTSE 100 corporations wrestle.
That already reveals within the numbers. Underlying revenue greater than doubled to $3.2bn within the first quarter of 2026. The Iran warfare began on 28 February, so the influence solely actually landed in March, the ultimate month of the quarter. That raises an apparent query. Will Q2 be an absolute stormer?
Can BP preserve using the oil value surge?
I feel it in all probability can. And never simply because crude costs have soared, permitting producers to promote oil at a premium. The Center East battle has created big volatility, which has boosted BP’s buying and selling arm. Administration referred to as its Q1 buying and selling efficiency “distinctive”.
BP’s refining operations are additionally firing on all cylinders, helped by stronger demand for diesel and jet gas. The shares have responded in type. BP’s up virtually 25% in 2026 and 46% over 12 months. With a trailing yield of 4.6% on prime.
Any Shares and Shares ISA investor holding BP might be thrilled with that, as it could offset losses elsewhere. Diversification at its greatest. However one other query nags at me. Is it too late to purchase BP at present?
As I write, the Strait of Hormuz stays closed. If that continues, the world may face a summer time of oil shortages. There’s speak of crude hitting $140, $150 and even $200 a barrel. In some corners of the market, we’re virtually there. Merchants now pay near $150 for quick bodily supply of sure crude grades. However in case you suppose that feels like a cast-iron case to purchase BP shares at present, I’d urge warning.
What may knock BP shares astray?
BP produces roughly 411,000 barrels a day throughout Iraq, Oman and the UAE. It might’t revenue from oil it might probably’t transport. And there’s one other menace.
Politicians may have a look at BP’s hovering earnings and determine to tighten that windfall tax. That will show fashionable with voters grappling with larger petrol and power payments.
The BP share value additionally dances to Donald Trump’s tune. One social media submit can ship crude costs hovering or slumping. If Hormuz reopens, merchants may begin pricing in decrease oil costs once more, dragging BP shares down. This isn’t a one-way guess.
BP’s earnings additionally swing wildly from 12 months to 12 months. Take a look at at its annual internet revenue for the previous 5 years.
- 2025 – $54m
- 2024 – $390m
- 2023 – $15.2bn
- 2022 – ($2.49bn)
- 2021 – $7.56bn
That internet loss in 2022 was all the way down to a $24bn write-off because it exited Russia’s Rosneft following the Ukraine invasion. All which will clarify BP’s temptingly-low ahead price-to-earnings ratio of 8.1. Analysts forecast a yield of 4.7% this 12 months, rising to 4.9% in 2027. That’s additionally tempting.
I purchased BP in September 2024 and I’m delighted I did. Would I purchase it at present? Personally, I’d tread fastidiously. The BP share value may go anyplace from right here. Commodity shares transfer in cycles, and proper now we’re nearer to the highest than the underside.
I’ll be conserving an in depth watch on BP although. One other shopping for alternative may current itself at any second. In case you want the diversification this inventory presents, I counsel you retain your eyes peeled too.
