## BP Stock Takes a Hit as Oil Prices Plunge Following Israeli Strikes in Iran
BP plc shares took a 1.70% tumble on Monday, settling at $30.99, mirroring a dramatic over 6% drop in crude oil prices. This slump, triggered by targeted Israeli airstrikes in Iran, cast a shadow over BP’s stock performance ahead of its third-quarter earnings report scheduled for Tuesday. As a major player in global energy markets with diverse operations in oil, gas, and renewable energy, BP’s fortunes are tightly intertwined with fluctuations in oil prices.
The benchmark West Texas Intermediate (WTI) crude oil price plummeted to $67 per barrel on Monday, marking its lowest point since early October and experiencing the steepest single-day drop since July 2022. This sell-off in oil markets was fueled by Israel’s precise strikes on Iranian military facilities, which, notably, left the country’s oil infrastructure unscathed. This measured response effectively alleviated concerns that oil production or export channels might be disrupted, diminishing the risk of major disruptions in the global oil supply.
The stability in Iranian oil exports, coupled with the absence of any anticipated supply shortfall, played a significant role in driving down oil prices. This situation has direct implications for BP, as a substantial portion of its revenues are derived from crude oil production. Lower oil prices tend to compress BP’s profit margins, as revenue from its upstream oil segment — encompassing exploration, extraction, and production of oil and gas — shrinks.
While BP has ventured into renewable energy and lower-carbon projects, fossil fuels remain a core revenue stream for the company. A sustained decline in oil prices would likely have a tangible impact on BP’s earnings.
The timing of Monday’s oil price slump adds an extra layer of significance as BP prepares to unveil its third-quarter earnings results on Tuesday before the market opens. The report will provide insights into how effectively the company is navigating current market conditions and whether its diversification into renewables and alternative energy sources is starting to provide substantial offsets to its traditional oil and gas business.
BP’s third-quarter performance is likely to reflect broader market trends, including the impact of slowing global demand, notably from China, and recent pronouncements from OPEC+ signaling an increase in production.
Goldman Sachs and ING analysts have suggested that with no immediate threat to Iranian oil exports, and as the market shifts its focus back to fundamental factors, oil prices are likely to remain under pressure. The anticipated market surplus extending through 2025, compounded by sluggish demand growth, could pose ongoing challenges for BP’s oil-dependent earnings.
## How to Invest in BP Stock
If you’re interested in participating in the BP stock market, whether it’s to purchase shares or take a contrarian position, you’ll need a brokerage account. You can find a comprehensive list of potential trading platforms online. Many platforms offer the option of buying ‘fractional shares,’ allowing you to own portions of stock without committing to an entire share. For instance, some stocks, like Berkshire Hathaway, can command thousands of dollars for just one share. However, if you only want to invest a fraction of that amount, brokerages allow you to do so.
In the case of BP, currently trading at $30.86, a $100 investment would secure you 3.24 shares of stock.
If your strategy involves taking a position against a company, the process is more intricate. You’ll require access to an options trading platform or a broker willing to facilitate ‘shorting’ a share of stock by lending you shares to sell. Information on shorting a stock can be found through various online resources.
Alternatively, if your broker allows you to trade options, you can either purchase a put option or sell a call option at a strike price exceeding the current share price. Both strategies enable you to profit from a decline in the share price.
According to data from Benzinga Pro, BP has a 52-week high of $40.40 and a 52-week low of $30.52.
