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All things considered, BP‘s (LSE:BP.) share price has delivered some impressive gains in 2025. Sure, it’s not been the FTSE 100‘s strongest performer year to date. But with oil prices diving and more boardroom changes, a 7% share price rise is a pretty solid return in my view.
But can it repeat the trick in 2026? If City forecasts are accurate, BP shares are in fact about to skyrocket.
Right now 28 analysts have ratings on the Footsie company. Their average share price target is 501.1p per share, up 18% from current levels.
But can BP’s share price really accelerate in 2026?
Strategic changes
As I say, oil prices haven’t stopped BP’s shares marching higher. They’ve risen after the business reset its growth strategy earlier this year, stripping down its green energy ambitions and refocusing on fossil fuels.
For shareholders who regarded its push into renewables as half-baked, this strategic pivot comes as welcome news. And BP’s been making big changes in the boardroom to sharpen execution of its new growth plan, further boosting investor confidence.
It appointed Albert Manifold as chair in July to steer its transformation. And in another significant step, it announced this month that Woodside Energy chief Meg O’Neill will replace Murray Auchincloss as BP’s chief executive in April.
Manifold has said O’Neill’s appointment “creates an opportunity to accelerate our strategic vision to become a simpler, leaner, and more profitable company“. Woodside’s investments in oil and gas — and particularly in the US — under O’Neill’s tenure suggest she may be the perfect fit for this new look BP.
In the meantime, the firm continues to make divestments to streamlining its operations and raise cash for investments and balance sheet repaits. It sold a 65% stake in its Castrol motor oil division for around $6bn to Stonepeak.
What might go wrong?
But I can’t discuss BP’s price outlook without addressing the elephant in the room: oil prices are diving, and could continue declining as 2026 progresses.
While the company’s shares have defied this pressure so far, I’m fearful for how long it can continue to defy gravity.
Brent crude’s slumped below $60 a barrel to its lowest level since early 2021. Increased production from both OPEC+ and non-OPEC+ countries mean the world is swimming in excess oil. This significant oversupply could grow, too if a Russia-Ukraine peace deal materialises.
Analysts at JP Morgan thinks things could get a lot worse before they get better. They reckon Brent could change hands in the $30s by 2027. They’re not alone in fearing for crude prices next year and beyond, with the steady transition to cleaner energy sources also impacting demand.
But let’s look past oil prices for a moment. There are other uncertainties investors need to weigh up when considering BP shares. Will the new chief executive deliver the goods? And will the company’s enormous debt pile (current level: $26.1bn) continue to build?
Bottom line
Today BP shares trade on a forward price-to-earnings (P/E) ratio of 11.7 times. That’s just above the 10-year average, and — while not sky high on paper — doesn’t fairly reflect the dangers facing the company.
Unlike City analysts, I think BP’s share price could fall sharply during 2026. I won’t be buying the stock for my portfolio, but it might be worth considering for investors with greater risk appetite than me.
