BP (LSE:BP.) shares have been a solid performer within the FTSE 100 over the last 12 months. The energy stock’s up 29.5% since July 2025, as rising oil and gas prices pave the way for expanding profit margins.
But with BP shares currently trading at around 515p, the question every investor’s now asking is whether there’s more fuel left in the tank. Let’s investigate.
A blockbuster second quarter
In its latest second-quarter trading statement for 2026, the company paints a very encouraging picture.
Brent crude averaged $103.85 per barrel during the period, up sharply from $81.13 in the first quarter. That’s a huge tailwind for oil production revenues. And don’t forget that BP’s own rule of thumb suggests that every $1 rise in the Brent price adds $340m to pre-tax profits annually.
The refining side of the business is looking even more impressive. BP’s Refining Indicator Margin (RIM) nearly doubled quarter-on-quarter to $29.6 per barrel from $16.9. And it’s a perfect demonstration of the business enjoying impressive operating leverage within a rising price environment.
Meanwhile, the balance sheet’s being actively strengthened. Net debt’s on track to fall from $25.3bn to $22bn-$23bn. And after redeeming €2.5bn of perpetual hybrid bonds in June, the company’s also making steady progress in simplifying its financial structure.
But what does this all mean for BP share price? Looking at the latest analyst forecasts, it seems most institutional investors think BP shares are likely to keep marching upwards. While there’s a fairly broad range of opinions, the average consensus suggests the oil & gas stock could climb to 599p by this time next year, with one analyst issuing a 700p price target.
Needless to say, this is a pretty strong vote of confidence. So is this a no-brainer?
What’s holding it back?
Despite what the impressive numbers suggest, not everything’s hunky dory at BP. Production volumes are actually falling at the moment, with the impact being offset by higher commodity prices. Part of this is being driven by regular scheduled maintenance.
However, another significant disruptive factor is the ongoing conflict in the Middle East, which management has no control over.
Even beyond the geopolitical turmoil, there are also some genuine execution concerns to consider. BP’s still in the process of implementing a strategic reset, divesting underperforming assets and paying down debts in the process.
As previously mentioned, the group’s making strides here, but it nonetheless adds complexity that could prevent it from fully capitalising on the current energy price tailwinds.
So what’s the verdict?
Overall, BP’s a business that’s quietly doing a lot of things right. The balance sheet’s improving, refining margins are strong, and the oil price tailwind is firmly behind it heading into the second half.
There are still significant risks to watch closely. But overall, for investors seeking exposure to the energy sector, this FTSE 100 business could be worth a closer look.
Should you invest £5,000 in Bp P.l.c. right now?
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Zaven Boyrazian does not hold any positions in the companies mentioned.
