UK energy stocks are experiencing a notable upswing, driven by rising oil prices and heightened geopolitical tensions, positioning defensive names like BP, Shell (SHEL), and Harbour Energy (HBR) as attractive options for investors.
As of June 13, 2025, the sector is benefiting from a favorable market environment, with oil prices climbing due to concerns over potential supply disruptions in the Middle East, creating a bullish sentiment for energy companies listed on the London Stock Exchange.
BP PLC has seen a significant short-term rally, with its share price gaining 8% over the past week, trading at £3.89 as of the latest data. Despite a year-to-date decline of 3.4%, the stock has risen 1.92% on June 11 alone, marking its fifth consecutive day of gains, fueled by oil prices reaching their highest levels in over two months.
Analysts remain optimistic, with an average 12-month price target of £4.27, suggesting potential upside, while BP’s market cap of £62 billion and a dividend yield of 6.2% offer stability for income-focused investors .
Shell PLC continues to demonstrate resilience, supported by strong fundamentals and a robust capital return strategy. The company reported adjusted earnings of $5.6 billion and cash flow from operations of $11.9 billion in Q1 2025, alongside strategic moves like the acquisition of Pavilion Energy to bolster its liquefied natural gas business.
Shell is also actively executing its share buyback program, repurchasing approximately 1.55 million shares on June 11 and 1.22 million on June 12, as part of a plan running through July 25, 2025, signaling confidence in its valuation. Trading at a P/E ratio of 9.3, Shell offers a dividend yield of around 4%, though risks from a slowing global economy and the Net Zero transition persist.
Harbour Energy PLC, another key player, is trading at a price that reflects a 37.7% upside potential according to analyst targets, despite a negative P/E ratio of -37.4x, indicating current unprofitability. With a market focus on oil and gas exploration across multiple regions, Harbour benefits from the same oil price surge, positioning it as a speculative but potentially rewarding investment compared to sector averages.
As oil prices hover near $70 per barrel, driven by geopolitical risks and seasonal demand, UK energy shares like BP, Shell, and Harbour Energy remain in focus for investors seeking defensive exposure in a volatile market.
