Shares in both BP and Shell have climbed around 3% over the past week and edged higher still following statements from U.S. President Donald Trump, who warned that American patience with Iran is “wearing thin.” As speculation mounts over potential U.S. military involvement in the Israel-Iran conflict, Brent crude briefly topped $77 per barrel before easing slightly.
Russ Mould, investment director at AJ Bell, pointed to “concerns the U.S. might join Israel’s military effort against Iran” as a key factor driving the oil price rally. The resulting investor confidence in the energy sector has helped push Shell and BP stocks higher, supporting the FTSE 100 index at a time when broader European markets have lagged behind.
Neil Wilson, UK strategist at Saxo, noted that the oil majors are “keeping the FTSE 100 in better shape than European peers,” due to their large index weightings. Shell, valued at £158.5 billion, is the second most valuable company on the FTSE 100, while BP, with a market capitalization near £62 billion, ranks eighth. Their size means movements in their share prices have an outsized effect on the overall index.
A Turnaround After a Tough Start
The recent rally marks a reversal from a turbulent first quarter for both companies. Weak oil prices earlier in the year, driven in part by global demand concerns and volatility linked to U.S. trade policies, dented earnings and forced cost-cutting measures.
Shell reported adjusted earnings of $5.58 billion for Q1 2025, down sharply from $7.73 billion in the same period of 2024. BP, meanwhile, scaled back its share buyback programme to $750 million—less than half of the previous quarter’s $1.75 billion—after Brent crude dipped below $70 per barrel in the aftermath of Trump’s tariff announcements.
Kathleen Brooks, research director at XTB, said, “Stock market gains at the beginning of the week were largely driven by the energy sector,” with the FTSE 100 hitting 8,902.34 on Monday—buoyed by oil company performance.
BP Faces Internal Turmoil
The turnaround comes at a challenging time for BP, which has been grappling with internal pressure and shareholder unrest. In April, the company faced a significant shareholder rebellion at its annual general meeting, as investors voiced frustration over BP’s pullback from its environmental commitments. The discontent followed a more than 30% decline in the company’s share price over the past year.
Reports earlier in 2025 even suggested that Shell had considered a takeover bid for BP, capitalizing on its weakened market valuation. While no formal proposal emerged, the speculation highlighted BP’s vulnerable position within the sector.
Outlook
As geopolitical uncertainty continues to roil energy markets, analysts are watching closely to see whether recent gains in oil prices can be sustained. While rising tensions may offer short-term boosts to oil majors, both BP and Shell will face ongoing scrutiny over long-term strategy—particularly in relation to their climate commitments and transition plans.
For now, however, Middle East volatility is once again reminding investors of the enduring influence of oil prices on equity markets—and the pivotal role energy giants play in shaping the FTSE 100’s performance.