BP shares topped the entire FTSE 100 in September, rising around 10% to outpace every other UK blue-chip stock on the London market.
Fellow oil and gas giant Shell came in as the month’s second-best performer, reflecting a broader surge in energy stocks driven by rising crude prices.
Brent crude spiked to $107 a barrel last month, providing significant tailwinds for both BP and Shell as investor sentiment around oil supply tightened sharply.
The war in Iran is dragging on, threatening oil supplies just as winter approaches, sending the price of crude, diesel, petrol, and jet fuel sharply higher.
UK diesel prices hit a record 199.18p a litre this week, underlining the real-world impact of the supply squeeze on consumers and businesses alike.
BP’s underlying replacement cost profit hit $5.7bn in Q2, up from $2.4bn in Q1, while operating cash flow surged to $10.9bn, reflecting strong financial momentum.
However, the rally was not entirely one-directional, with Brent slipping back towards $96 near the end of September as hopes of diplomatic progress in the region resurfaced.
Saudi Arabia also increased exports after restoring its East-West pipeline, easing some supply pressure and introducing fresh uncertainty into crude’s near-term trajectory.
Oil stocks do not simply follow the price of crude, but it carries enormous influence, with refining margins, gas prices, trading conditions, production levels, and US dollar strength all playing a role.
With winter approaching and Middle East tensions unresolved, BP’s shares may continue to find support, though investors are being reminded not to chase short-term momentum alone.
BP shares are up 33% over the last year and offer a trailing dividend yield of roughly 4.5%, making the income case alongside the growth story a compelling combination.
At a forecast price-to-earnings ratio of approximately 7.3, the stock does not appear expensive relative to its earnings potential, even after September’s strong run.
Climate change remains a significant long-term challenge for BP, and some investors may choose to avoid the stock on environmental grounds, which is an entirely understandable position.
The world needs to reduce its reliance on fossil fuels, but the energy transition is not going to happen overnight, and oil and gas will remain essential for years to come.
A major clean-energy breakthrough could shift the equation materially, while BP must also continue replacing reserves and identifying profitable new sources of oil and gas production.
Oil prices could plunge sharply if the conflict ends, while a war-induced global economic slowdown would hit demand from the opposite direction, highlighting the dual risks investors face.
Despite those risks, BP continues to serve as a portfolio stabiliser, providing a rare point of steadiness on days when broader markets are under pressure.