BP's shares have surged to the top of the oil sector amid the war. Is it worth buying them?

British BP's papers have broken into the leaders of the oil and gas sector on the stock market amid the conflict between the U.S. and Israel with Iran, Bloomberg noted. While the competitors of the British company (in particular, Exxon Mobil) face large-scale disruptions in production due to the war in the Middle East, BP is preparing to report on April 28 on "exceptional" profit in oil trading, the agency notes.

At the premarket on April 27, BP securities in New York are growing by 1.3%, since the beginning of the year they are in the plus by more than 33%. Moreover, since the beginning of the war in Iran in late February quotations of the British oil and gas company rose by about 20%, while the shares of Exxon, on the contrary - down 2%. TotalEnergies in New York for the same period added about 10%, Chevron since the end of February - in the plus less than 1%, Shell - growing at just over 6%.

In April, BP said it recorded "exceptional" oil trading performance in the first quarter of 2026 amid sharply higher oil prices due to the war in the Middle East. This unexpected profit came at a crucial time for BP and its new CEO Meg O'Neil (who took over the company on April 1), BP's fourth chief executive in the past six years, Bloomberg writes. BP's shares have had the worst performance in the sector since the company's 2020 strategy to invest massively in low-carbon energy and phase out fossil fuels failed to materialize, leading to a sharp rise in BP's debt. However, against the backdrop of the war in Iran, this trend has reversed.

Exxon, the energy market leader of the last six years, has been hit hardest in the sector by the Iranian crisis. About a fifth of its global production (mainly from Qatar and the UAE) is blocked in the Strait of Hormuz. In addition, a large liquefied natural gas complex in Qatar, of which Exxon owns a share, was damaged by Iranian missiles, and its restoration may now take years, Bloomberg notes.

High oil and gas prices have brought benefits to the supermajors, but these benefits are unevenly distributed, the agency points out with reference to the data of the analytical company Raymond James. Thus, Exxon's production volume, affected by the war in the Persian Gulf, is about five times higher than Chevron's, the analysts note. In addition, European giants have much larger trading divisions than their American competitors, which gives them more opportunities to capitalize on the volatility of energy prices.

BP is to publish its report for the first quarter of 2026 on Tuesday, April 28, followed by France's TotalEnergies on Wednesday. On Friday, Exxon and Chevron will publish similar reports. Shell will report on Ma 7.

Shell and Total earlier, as well as BP, pointed to higher profits for the first three months of 2026 amid volatile oil prices. Exxon and Chevron are more cautious about risks in oil trading, Bloomberg writes. They usually use derivatives to reduce price volatility after cargoes have been shipped. This strategy, Bloomberg notes, indicates that the two U.S. companies may record mark-to-market losses of nearly $7 billion in the first quarter. However, both expect these so-called "temporary effects" to fully offset in the coming quarters when customers receive shipments.

BP's shares performed better partly because they were initially cheaper than competitors' securities - and therefore had more upside potential at oil prices of $100 per barrel, Bloomberg points out. Analysts expect that after the suspension of the share buyback program (buyback), which was frozen earlier this year to save money, the company will direct cash inflows to reduce debt. In January 2026, BP said it expects net debt to be between $22 billion and $23 billion at the end of the fourth quarter, down from $26.1 billion at the end of the third quarter.

"The market is short on crude, so normalized prices will stay high [for] longer," said Melius Research energy analyst James West. - Exxon has some production stuck in the straits, while BP benefits from a new CEO and a chance for recovery," he added.

BP's new strategy to return its focus to fossil fuels is gaining momentum. In March, the company won approval from US President Donald Trump's administration to develop the deepwater Kaskida field - its first major project in the Gulf of Mexico since the 2010 Deepwater Horizon disaster. BP also acquired stakes in offshore blocks in Namibia, expanding its presence in one of the world's most sought-after exploration centers.

RBC Capital Markets analyst Biraj Borkhataria believes that in the current environment, the best strategy for BP is to channel all additional cash flow into reducing net debt.

At the moment, Wall Street's sentiment towards BP and ExxonMobil remains predominantly neutral-positive. Out of 31 analysts tracking BP's American Depositary Receipts (ADRs), 12 experts recommend their purchase, while 13 out of 30 experts have a similar recommendation for Exxon's shares. The recommendation "Hold" is prevailing for both companies (15 votes each). At the same time, negative recommendations ("Sell") are the rarest for both companies. BP securities have two such recommendations, Exxon shares - one.

This article was AI-translated and verified by a human editor