Is BP a Buy Again? Signs of a Share Price Comeback

BP has long been a heavyweight in the UK stock market, but in recent years, the company’s share price has taken more hits than wins. From oil price crashes and dividend cuts to mixed messaging about its green energy transition, many investors wrote BP off as a relic of the past.

But in 2025, things are beginning to change. BP’s share price has started to climb again, investor confidence is quietly returning, and the question on many investors’ minds is clear: is BP a buy again?

BP’s Share Price in Context

BP’s stock has had a rocky ride over the past decade. After peaking at over 550p in 2014, the company saw years of decline, with low oil prices and environmental scrutiny weighing on the business. The COVID-19 pandemic sent shares crashing to nearly 200p in 2020. Since then, BP has staged a gradual recovery and is now trading in the range of 400p.

While still below its historical highs, that recovery is meaningful. For long-term investors, it raises a critical question: is this growth sustainable, or just a short term reaction to rising oil prices?

What’s Behind BP’s Recent Share Price Momentum?

Several factors are contributing to BP’s improving position in the market.

First, oil prices have remained strong. Brent crude has traded steadily between $85 and $90 per barrel in 2025. As a major player in oil and gas, BP’s profitability is closely tied to energy prices. High prices mean higher margins, especially in upstream operations.

Second, BP has doubled down on rewarding shareholders. The company currently offers a dividend yield of just over 4 per cent, and it has committed to ongoing share buybacks. These moves signal confidence from BP’s leadership and make the stock more attractive for income focused investors.

Third, while BP initially made aggressive commitments to become a green energy leader, recent strategy shifts have balanced those ambitions with a renewed focus on core profitability. The business is still investing in renewables, but it is also strengthening its traditional oil and gas operations, which remain the profit engine of the business.

Lastly, BP’s financial health has improved. Debt levels have come down, operating cash flow has stabilised, and the company has reported consistently positive earnings for the last four quarters.

Challenges and Risks Still in Play

Despite the recovery, investors should not ignore the risks that come with buying BP shares.

One concern is regulatory pressure. As governments tighten climate regulations, BP may face rising costs to comply with emissions targets, especially across Europe.

Another issue is market perception. BP continues to receive mixed reviews from both ESG-conscious investors and traditional energy backers. Its identity crisis part oil major, part energy transition leader has confused some investors and limited share price momentum.

There is also the broader risk of falling oil prices. If global demand slows or if geopolitical instability disrupts supply chains, oil prices could drop. For a company still heavily reliant on fossil fuels, that would directly impact revenue.

Is BP a Buy Right Now?

The answer depends on your investment goals.

If you’re seeking growth, BP might not be the fastest horse in the race. It’s not a tech stock or a small cap disruptor. However, it offers value and stability that some portfolios lack, especially during inflationary periods.

If you’re focused on income, BP is more compelling. The dividend yield is solid, and the buyback programme supports shareholder value. The price to earnings ratio is lower than many peers, suggesting the stock is reasonably priced compared to its earnings potential.

If you are building a long term, dividend focused UK portfolio, BP could be worth a second look particularly if you believe in the long-term demand for energy and are comfortable with the sector’s cyclical nature.

BP’s recovery is not just a flash in the pan. Improved oil prices, stronger balance sheets, and consistent shareholder returns are real signals of progress. While not without its risks, BP now offers investors a potential combination of value, income, and stability.

Content on IceburgWealth.com is for informational purposes only and not intended as investment advice. While we strive to provide accurate and up-to-date information, Iceburg Wealth is not responsible for any errors or omissions, or for outcomes resulting from the use of this information. Readers should seek professional advice before making any financial decisions.