Background and Causes
The BP share is currently experiencing a dramatic crash, exacerbated by several factors. One of the main reasons is the return to fossil core business. At the beginning of 2025, BP made a strategic shift by refocusing more on the oil and gas business. This pivot was initiated by pressure from investors like Elliott Asset Management.
Another factor is the declining raw material prices. Global oil prices have fallen sharply, negatively impacting BP’s profits. Following aggressive US tariffs, prices dropped from nearly 75 to below 60 dollars per barrel.
Additionally, investor discontent is apparent: Major shareholders such as Legal & General and Robeco have announced resistance to the re-election of Chairman Helge Lund, indicating dissatisfaction among investors.
Financial Situation
BP’s financial situation is also concerning. The increased debt rose by 4 billion dollars in the first quarter of 2025, primarily due to seasonal inventory buildups and scheduled payments.
Profit projections for 2025 are low, with an expected earnings per share of about 0.544 USD. The dividend forecast stands at 0.326 USD. The production decline affects upstream production, which has decreased due to sales in Egypt and Trinidad.
Impact on Investors
The share price of BP has significantly declined in recent months. On April 10, 2025, the price fell to a 52-week low of about 3.29 GBP, despite the average target price being 5.35 GBP.
Investors are faced with the question of whether to sell or hold the shares. The current situation is characterized by uncertainty, and the decision depends on long-term expectations.
The release of Q1 2025 results on April 29, 2025, will be crucial for investors to better understand BP’s future strategy and financial stability.