BP’s share price has risen sharply over the past year, delivering a 16% gain in the last three months and 53% over 12 months, as the oil major benefited from volatility linked to Middle East conflict and higher energy prices. Despite the rally, the stock still trades near the level it held at the start of the millennium, reflecting a long history of market shocks and company-specific setbacks, including the dotcom crash, the financial crisis, Deepwater Horizon, Covid-19, and losses tied to its Russian Rosneft stake after the Ukraine war.
Recent operating results suggest BP has started 2026 strongly. Its first-quarter revenue, reported on 28 April, increased by £5.3 billion to £52.3 billion, helped by a powerful trading performance as customers sought to secure energy supplies. However, the sustainability of those gains remains uncertain because BP’s earnings are closely tied to oil prices and geopolitical developments, particularly the situation involving Iran and the Strait of Hormuz.
The company is also facing renewed political scrutiny in the UK. Chancellor Rachel Reeves has ended a tax rule that had allowed oil and gas firms to offset UK profits against overseas losses, a change designed to help finance a £1.8 billion cost-of-living support package. BP already pays a large amount under the current windfall tax regime, with the levy accounting for around a third of its total taxes paid to the government.
The article notes that BP has experienced a turbulent corporate history, including abrupt leadership changes under former CEOs Bernard Looney and Murray Auchincloss, as well as ongoing pressure to respond to the energy transition and climate change expectations. Even so, the company still offers income appeal, with a forecast dividend yield of 4.6% and a forward price-to-earnings ratio of 8.2, suggesting the shares are not expensive by market standards.
The writer argues that BP is a cyclical energy stock and that buying during periods of weakness may be preferable to chasing it after a rally. He says he bought BP for his SIPP about 18 months ago when sentiment was poor and intends to keep holding through the cycle while reinvesting dividends. Although he is cautious about buying at current levels, he suggests long-term investors may want to wait for a pullback, which could arrive soon if geopolitical optimism fades.
The piece closes by highlighting that BP has become a beneficiary of recent market fears, but its near-term share performance may depend heavily on peace negotiations, oil prices, and shifting investor sentiment.
