How to Buy BP Shares UK [2024]

As we stand on the precipice of an unfolding climate emergency powered by the burning of fossil fuels, we are starkly reminded that these same fuels still account for a staggering 80% of global energy needs. And while strides towards cleaner alternatives are being made, the complete transition is anticipated to unfold over many decades to come, a timeline at odds with the urgency of our situation.

In spite of all this, investing in a profitable, dividend-yielding oil and gas company may still compel you. So why not consider BP, one of the “Big Oil” behemoths with lineage extending back to the early 20th century?

Keep reading as we analyse the most important facts about the oil conglomerate, explain how to buy BP shares in the UK, and provide an overview of the most reliable brokers to use.

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What is BP?

BP plc (LSE: BP), previously known as The British Petroleum Company plc and BP Amoco plc, is a British multinational oil and gas corporation involved in every aspect of the sector, ranging from exploration and extraction to refining, distribution and marketing, power generation, and trading.

BP's homepage — BP’s homepage. Source: bp.com

The energy giant is one of the six or seven “supermajors” or “Big Oil” companies in the world, and with $230.8 billion in revenue in its last fiscal, it ranks only behind five of its competitors: Sinopec, PetroChina, ExxonMobil, Shell, and Total Energies.

BP operated across 62 countries worldwide, with operations organised into three primary business segments: gas and low carbon energy, oil production, and operations, as well as customers and products.

The company has around 20,650 service stations worldwide, which it operates under the BP brand (globally) and the Amoco brand (US), and the Aral brand (Germany). Its largest division is BP America in the United States.

The advent of the coronavirus pandemic in 2020 and the resulting lockdowns and travel restrictions led to numerous oil and gas companies struggling to turn a profit. Of course, BP was not immune to this downturn, recording a substantial net loss that surpassed $20 billion that year, further exacerbated by write-downs of oil and gas assets.

BP trades on the London Stock Exchange (LSE) under the ticker BP, where it is a constituent of the FTSE 100 Index, as well as the Frankfurt Stock Exchange (FWB) and the New York Stock Exchange (NYSE).

From 2013 until Russia invaded Ukraine in 2022, BP held a stake close to 20% in Russian energy company Rosneft. This stake accounted for nearly half of its oil and gas reserves as well as a third of its production. The eventual divestment resulted in charges amounting to up to £18.7 billion.

BP’s environmental record

From 1988 to 2015, BP was accountable for 1.53% of the world’s industrial greenhouse gas emissions, and according to a 2019 Guardian ranking, BP was the 6th largest emitter of such pollutants in the world.

Moreover, the company has found itself at the heart of several significant environmental and safety incidents over the years, including the 2005 explosion at the Texas City Refinery, which led to the tragic loss of 15 lives and resulted in an unprecedented fine from OSHA (Occupational Safety and Health Administration); the Torrey Canyon disaster in 1967, recognised as Britain’s largest oil spill; and the 2006 oil spill in Prudhoe Bay, the most significant spill of its kind on Alaska’s North Slope, attracting the largest per-barrel penalty for an oil spill at the time.

Arguably, the most disastrous environmental calamity tied to BP was the Deepwater Horizon oil spill of 2010, which marked the most extensive accidental release of oil into marine waters ever recorded. This incident saw roughly 4.9 million barrels of oil discharged into the ocean, leading to devastating environmental, human health, and economic impacts. It also drew severe legal and public relations consequences for BP.

The company ultimately paid upwards of $4.5 billion in fines and penalties, with an additional $18.7 billion doled out for penalties and other claims related to the Clean Water Act, making it the largest criminal resolution in US history. In total, the oil spill left BP with costs exceeding $65 billion.

Where to buy BP shares?

Thanks to an abundance of online brokers, like eToro, buying shares in your favorite companies is as easy as ordering takeout. In fact, purchasing shares in BP, and investing in stocks in the UK at large, only entails a few straightforward steps.

That said, choosing a broker that aligns with your specific needs, including your investment goals and trading style, is instrumental in facilitating a seamless trading experience.

With these factors in focus, let’s unpack the process step-by-step.

How to buy BP shares? Step-by-step process

As a publicly-traded company, investors can purchase shares of BP through a regular retail broker. The following section will offer an in-depth overview of the step-by-step process as well as our recommendation for specific platforms to use.

Step 1: Choose a broker

As mentioned above, to buy BP shares online, you’ll need a brokerage account. Your ideal platform should match your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you wish to trade more advanced financial vehicles like options). When assessing brokers, here are some crucial characteristics to consider:

Fees: Brokerage fees are a type of fee collected by brokers to execute your transactions or provide specialised services. Fortunately, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
Security: Choose a trustworthy broker by ensuring it is fully authorised and regulated by the Financial Conduct Authority (FCA);
Trading tools: Active traders may prefer brokerage accounts with all the bells and whistles. Some brokers offer fully customisable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s typically a good idea to look for a user-friendly platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
Access to market data: Look for a platform that offers solid market research and reporting tools to help you trade confidently with updated data;
Fractional stock trading: Fractional shares enable investors to buy stocks or ETFs by the sterling amount, which is particularly valuable for investors with limited capital and the desire to build a diversified portfolio or investors looking to set up a dollar-cost averaging (DCA) strategy.

Top picks

To securely invest in BP and buy BP stock, consider these brokers:

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2. Interactive Brokers (IBKR)

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Step 2: Fund your account

Once you’ve decided on a broker and set up an account, you can fund your account. Various deposit methods will typically be available, including linking a bank account directly, using a debit, credit, or prepaid card, or opting for a third-party payment service such as PayPal (PYPL).

Remember, it can sometimes take up to three days for the money to reach your account.

Step 3: Research the company

As a publicly listed company, BP’s annual earnings reports, shareholder presentations, information on dividends, Environmental, Social, and Governance (ESG) strategies, as well as recent press releases, can be acquired directly from its investor relations section.

In addition to offering insight into BP’s financial stability and future strategies, these reports also highlight potential hurdles the company, or even the entire industry, might face, including keeping up with sustainability pledges, ongoing effects from the pandemic, and intensifying regulatory scrutiny.

Step 4: Decide how much you want to invest

Next, you must determine how much to invest, and this depends on various factors, such as the current stock price and the number of shares you wish to acquire. If the stock’s price is financially out of reach, don’t panic – consider fractional shares. With fractional shares, you can purchase a portion of a share at the exact cost that matches your budget.

Remember, however, that given the inherent volatility of the stock market – results are never guaranteed. Therefore, only invest what you are willing to lose and carefully evaluate the level of risk you’re prepared to take on.

Step 5: Place your order and buy BP shares

After deciding the number of shares or the sterling amount of shares you wish to acquire, it’s time to place your order. Simply log into your broker account and enter the ticker BP in the search bar.

You’ll have two execution options:

Market order: An order to buy shares at the current market price, typically executed instantly (subject to availability);
Limit order: An order activated once the stock hits your specified price. For example, if you wish to buy BP stock at £450 or below, you’d set the limit price at £450. The order will then be fulfilled once the share price drops to £450 or lower.

Invest in BP with index funds

Investing in individual companies often exposes you to market volatility and unexpected shifts in stock prices. As such, it is generally advised to diversify across various asset classes, industries and sectors. One of the easiest ways to accomplish this is by investing in ETFs.

Step 6: Monitor your investment

Unfortunately, oil and gas stocks tend to be more volatile than the broader market due to the shifts in supply and demand of the underlying commodity. Moreover, the sector is particularly susceptible to legal and regulatory risks, often the consequence of accidents, such as oil spills.

Also, regularly inspect the company’s performance through annual reports. The thing is—you should particularly monitor crude oil prices, as they significantly impact oil and gas stock values.

Finally, conduct periodic evaluations of your investment strategy. And in light of this information, make necessary adjustments to align with your findings.

Should I buy BP shares?

Whether investing in BP is the right choice for your investment portfolio depends on your risk tolerance and investment goals.

In addition to examining the company fundamentals, you can use technical analysis to evaluate the stock and identify trading opportunities in price trends and patterns seen on charts.

The gauge displayed here represents the real-time technical analysis overview of BP for your specified timeframe. It can simplify trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.

Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favourable buy/sell conditions if this is consistent with their strategy.

Common mistakes to avoid when investing in the stock market

Some of the most common mistakes to avoid when investing in the stock market include:

Not conducting thorough research on the stock;
Lacking well-defined financial goals;
Trying to time the market;
Not diversifying your investments across a variety of sectors or asset types;
Allowing your emotions to dictate your investment decisions.

How to sell BP shares?

You can sell your shares if you see BP performing differently than expected or after reaching your desired financial goal.

To do this, simply:

Log on to your broker account;
Navigate to the BP’S detail page;
Input the number of shares or the sterling amount you want to offload;
Tap sell.

Pros and cons of buying BP shares

Pros

An indispensable energy source: For the foreseeable future, oil will continue to be a crucial cog in the global energy machinery. And though its proportion in the overall energy market is set to contract, the demand for oil is predicted to keep growing until at least 2040;
Income-generating: Standard for many oil and gas stocks, BP provides a handsome dividend yield, standing at 4.75% as of January 3, 2024;
Diversified business: BP’s operations extend beyond oil, encompassing various divisions of the energy sector, including natural gas, renewable energy, and petroleum products;
Size and market position: As one of the world’s largest oil and gas companies, BP holds a formidable position in the market, which can offer a degree of stability for investors.

Cons

Cyclicality: The oil and gas industry is known for its cyclical nature, characterised by alternating periods of booms and busts;
Price volatility: Stocks in the oil and gas sector are usually subject to higher volatility than the broader market, given their sensitivity to fluctuations in the supply and demand of the underlying commodities. For example, gas and oil stocks plummeted from mid-2014 to early-2016 due to a surplus of crude oil and natural gas supply;
Risk of dividend cuts: If the company fails to generate sufficient revenue to sustain payments to shareholders, dividends may be subject to cuts;
Operational hazards: Accidents such as oil spills, while not frequent, can have devastating environmental consequences and spark intense media scrutiny and political backlash. This can severely tarnish the company’s reputation and trigger a drastic fall in share price, as was the case with BP during the 2010 Deepwater Horizon oil spill, which continues to have ramifications even years later;
Legal and regulatory threats: Operating in the oil and gas sector, BP is exposed to a myriad of legal and regulatory risks, including potential changes in laws relating to climate change and emissions;
Transition challenges: As the global energy landscape shifts towards renewable sources, traditional oil companies like BP face the challenge of adapting their business models. While BP has begun investing in renewable energy, the outcome of these ventures remains uncertain;
Environmental impacts: Fossil fuel combustion releases substantial quantities of carbon dioxide into the atmosphere, contributing to global warming. In response, governments are stepping up efforts to decarbonise, which could lead to reduced demand for oil and gas in the forthcoming decades.

Remember

Conduct your own in-depth research and ensure robust risk management measures are in place before diving into the market. Ultimately, investing aims to make money over the long term, so investors should focus on where companies will be ten years from now rather than short-term fluctuations in the stock market.

In conclusion

Indeed, shares in oil and gas companies have the potential to generate substantial returns from capital appreciation as well as sizeable dividend payments, particularly during periods of soaring underlying commodity prices.

Unfortunately, oil is inherently a volatile asset. And while well-timed investments in oil can yield significant profits, investment in the sector demand careful review.

Additionally, we find ourselves in a world gradually but assuredly shifting its focus towards renewable energy. This transition, however, is bound to shape the future of oil and gas companies in the long run. Therefore, it’s critical to consider not only financial factors but also the environmental impact and sustainability practices of the companies.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about buying BP shares