BP Stock Outlook on December 5, 2025: Buybacks, Castrol Sale Talks and a Hydrogen Retreat Rewire the BP p.l.c. Story

BP p.l.c. (NYSE: BP, LSE: BP.) is heading into the final stretch of 2025 with its share price near the top of its recent range, investors swimming in dividends and buybacks, and the company quietly stepping back from some of its most ambitious hydrogen projects. At the same time, it’s reported to be in advanced talks to sell its Castrol lubricants arm for more than $8 billion, a move that could reshape the balance between “old” oil and “new” energy in BP’s portfolio. ^[1]

This article pulls together the latest news, forecasts and analyses as of 5 December 2025 to sketch where BP stock stands right now and what could matter most for investors going into 2026.

BP share price today: ADR vs London listing

On the New York Stock Exchange, BP’s American Depositary Receipts (ADRs) recently traded around $37.2–$37.3, close to their 52‑week high of $37.64. TS2 Tech

On the London Stock Exchange, where BP remains a FTSE 100 heavyweight, the shares (ticker BP.) closed on 4 December 2025 at 465p, up 0.22% on the day and about 18% higher than at the start of the year. ^[2]

Performance markers from recent coverage give a sense of the run BP has been on:

Over the last six months, BP shares in London are up roughly 24–27%, depending on the dataset cited. TS2 Tech+1
Over the past year, London‑listed shares have gained about 16–17%, with year‑to‑date performance a touch higher. TS2 Tech+1

That puts BP firmly in “recovery” territory after a sluggish stretch earlier in the decade, but still at a valuation that many analysts describe as reasonable compared with other oil majors. TS2 Tech+1

The big headlines this week: buybacks, Castrol and hydrogen U‑turns

1. Relentless share buybacks

BP is leaning hard on share repurchases to support earnings per share and the share price.

Key points from recent regulatory filings and trading summaries:

A $750 million buyback announced with Q3 results was completed by 31 October 2025. TS2 Tech
On 4 November 2025, BP launched another buyback programme of roughly $750 million, scheduled to run until 6 February 2026. TS2 Tech+1
Trading updates show BP repurchasing around 1.5 million ordinary shares per day on UK venues in late November and early December, at prices typically in the 450–470p range. TS2 Tech+2TradingView+2
On 2 and 3 December 2025 alone, BP bought back about 1.5 million shares per day under this programme. ^[3]

By late November, BP reported more than 835–837 million shares in treasury, out of roughly 15.6 billion ordinary shares outstanding, meaning a sizeable slice of the company has effectively been retired from free float. TS2 Tech+1

For equity holders, this combination of buybacks and a rich dividend (more on that in a moment) is central to the “shareholder yield” argument: TS² TechStock, summarising several data providers, estimates a total shareholder yield of roughly 11% when buybacks and dividends are combined at recent prices. TS2 Tech

2. Castrol sale talks: Stonepeak in pole position

One of the biggest new storylines for BP stock is the future of Castrol, the group’s well‑known lubricants business.

According to a Dow Jones/Financial Times report carried by MarketScreener on 4 December 2025, BP is in advanced talks to sell Castrol to U.S. infrastructure investor Stonepeak for more than $8 billion. ^[4]

Key points:

BP reportedly put Castrol up for sale in February 2025, inviting interest from multiple bidders. ^[5]
Earlier coverage highlighted speculation about a possible sale to Saudi Aramco, but the latest reporting suggests Stonepeak is now at the front of the queue. TS2 Tech+1
No deal has been finalised and both BP and Stonepeak have declined to comment; talks could still collapse or another bidder could emerge. ^[6]

For investors, a Castrol sale raises a couple of big strategic questions:

Does BP use the proceeds to pay down debt, fund more buybacks, accelerate investment in lower‑carbon projects – or some mix of all three?
Does shedding a relatively steady lubricants business make the remaining portfolio more cyclical, or does it sharpen BP’s focus on higher‑return core assets?

Analyst and retail commentary so far tends to frame the potential deal as another step in BP’s broader goal of raising $20 billion in asset sales through 2027, a target linked to pressure from activist investor Elliott Investment Management, now a more‑than‑5% shareholder. ^[7]

3. A sharp retreat from flagship hydrogen projects

While investors have been rewarded with cash, BP has also been walking back some of its most high‑profile decarbonisation projects in the past week.

Two moves stand out:

H2Teesside (UK)
- BP has officially withdrawn its application for the H2Teesside blue hydrogen and carbon‑capture project in north‑east England. ^[8]
- The site at the former Redcar steelworks is being prioritised instead for what is billed as one of Europe’s largest AI data centres, backed by the UK government as part of new “AI growth zones”. ^[9]
- BP has pointed to deteriorating hydrogen demand from local industry, as well as the incompatibility of running both a large hydrogen plant and data centre on the same land. ^[10]
Duqm Green Hydrogen Project (Oman)
- BP has also cancelled its Duqm Green Hydrogen Project in Oman, a gigascale scheme that was slated to produce around 150,000 tonnes of green hydrogen per year from a 1.5 GW renewables‑powered plant. ^[11]
- The project had secured land rights at Duqm port in mid‑2023, but both BP’s scheme and a neighbouring Engie/Posco hydrogen venture have now been shelved. ^[12]

Energy‑transition watchers see these moves as part of a strategic pivot: earlier in 2025, BP had already scrapped the smaller HyGreen hydrogen project in Teesside, and had been signalling more caution around capital‑intensive green projects with uncertain near‑term returns. ^[13]

In short, BP is still talking about net zero – but capital is clearly being redirected toward projects with clearer cash‑flow visibility or shareholder payout potential.

4. Operational & trading tidbits: pipelines and gasoline deals

Recent short updates also highlight some more granular operational moves:

BP has been active in Northwest European gasoline markets, selling around 8,000 tonnes of Eurobob E5 gasoline to Aramco Trading and 4,000 tonnes of Eurobob E10 to TotalEnergies in barge trades. ^[14]
It joined other shippers in opposing proposed changes to Colonial Pipeline’s gasoline shipment rules in the U.S., arguing that the switch in how blending margins are allocated would hurt refiners and marketers. ^[15]
Earlier in November, BP also dealt with an Olympic Pipeline leak in Washington state that temporarily disrupted jet‑fuel supplies in the Pacific Northwest; subsequent reports suggest BP has identified the source and moved toward a restart, easing operational risk. TS2 Tech

None of these stories move the long‑term thesis on their own, but they underline the operational complexity – and the regulatory scrutiny – that comes with being a global integrated oil major.

Q3 2025 earnings: solid beat, strong cash flow and a higher dividend

A lot of the current optimism around BP stock traces back to its third‑quarter 2025 results, released on 4 November 2025.

From BP’s slides and subsequent coverage:

Underlying replacement‑cost profit (BP’s preferred earnings measure) came in around $2.2 billion, modestly ahead of analyst expectations near $2.0 billion. TS2 Tech+2MarketBeat+2
Adjusted EPS was roughly $0.85 per ADR, versus forecasts in the low‑$0.70s, a beat of about 10–15%. TS2 Tech+1
Revenue landed near $48–49 billion, comfortably above consensus around $44 billion. TS2 Tech+1
Operating cash flow was about $7.8 billion for the quarter, showing that BP can still throw off substantial cash at Brent prices in the $60–70 range. TS2 Tech+1

Crucially for income‑oriented investors:

BP raised its quarterly dividend again. MarketBeat notes a new quarterly ADR dividend of $0.4992, or roughly $2.00 per ADR annually, implying a yield of about 5.5–5.6% at recent prices. ^[16]
TS² TechStock calculates that, combined with buybacks, BP’s total shareholder yield is running around 11%. TS2 Tech

The company reaffirmed capital expenditure guidance of around $14.5 billion for 2025, and a capital frame of $13–15 billion per year for 2026–27. ^[17]

Taken together, Q3 painted a picture of a company that has largely completed its “post‑pandemic reset” and is now focused on optimising capital returns rather than aggressively chasing volume growth.

Macro backdrop: oil prices around $63 and demand not dead yet

BP’s fate is still tightly linked to the oil market, so the macro picture matters.

Oil prices: steady, with a 2% weekly gain

On 5 December 2025, Brent crude was trading around $63.3 per barrel, with WTI just under $60, leaving both benchmarks on track for a roughly 2% weekly gain. ^[18]

Drivers cited in recent coverage include:

Expectations that the U.S. Federal Reserve could cut rates by 25 basis points at its next meeting, which would support economic activity and oil demand. ^[19]
Geopolitical tension, including concerns around Venezuela and ongoing uncertainty over Russia‑Ukraine negotiations, which keeps a risk premium baked into prices. ^[20]
Countervailing worries about oversupply, with Saudi Arabia cutting its official selling price for some grades to multi‑year lows. ^[21]

For BP, a Brent band in the low‑to‑mid $60s is not the bonanza of 2022, but it is perfectly adequate to generate hefty cash flows given the cost cuts and portfolio pruning of the past few years.

Long‑term oil demand: “five to ten years of decent growth”

A new Morningstar report on “The Future of Oil to 2050,” highlighted by Rigzone this week, adds some context:

Analysts expect oil demand to grow from 104 million barrels per day in 2024 to a peak of 108 million b/d in 2032, before gradually declining to 96 million b/d by 2050. ^[22]
Their updated mid‑cycle Brent price is $65 per barrel in real terms for 2025–2034, close to current spot levels. ^[23]

In other words, Morningstar’s base case is not a rapid collapse in oil demand, but a slow peak and gentle glide‑path downwards – a backdrop that broadly supports the cash‑flow assumptions behind BP’s buybacks and dividends, even if it complicates long‑duration green investments.

What analysts are saying: targets, ratings and fair value

Wall Street view on the BP ADR (NYSE: BP)

The picture from U.S.‑focused research aggregators is broadly constructive:

MarketBeat:
- Consensus rating: “Moderate Buy”, based on 19 analyst ratings (1 sell, 9 hold, 9 buy / strong buy). ^[24]
- Average 12‑month price target: $43.14, implying roughly 16% upside from a current price a little above $37. ^[25]
- Target range: $26.50–$66.00, underlining just how much disagreement there still is about the long‑term story. ^[26]
StockAnalysis:
- Consensus rating: “Hold” from 9 covering analysts.
- Average target: $39.87, pointing to about 7% upside over the next year. ^[27]
MarketWatch’s ADR estimate page shows an average target around $39.9 with an overall tilt toward “Overweight” / positive recommendations. ^[28]

The takeaway: U.S. analysts, on average, see modest to solid upside from current levels, but the consensus is more “steady compounder” than “explosive growth stock.”

City view on BP.L (London listing)

For the London‑listed shares, the pattern is similar:

TipRanks (LSE: GB:BP):
- Consensus rating: “Moderate Buy” based on 14 analysts.
- Average 12‑month target: 467p, implying about 3.9% upside from a recent reference price of 449.5p, with a range of 400–525p. ^[29]
MarketScreener’s consensus page for BP shows:
- Mean recommendation: “Outperform” from 19 analysts.
- Average target only slightly above the current price, consistent with a view that much of the easy re‑rating has already happened. ^[30]
A Morningstar‑linked analysis on Yahoo Finance nudged BP’s fair value estimate to about £4.59 per share (459p), fractionally below the current 465p closing price. ^[31]

Put together, London‑focused analysts appear to see BP as fairly valued to slightly cheap, with upside coming mainly from cash returns rather than big changes in the earnings multiple.

Quant and DCF models: a more cautious tone

Not all models are bullish:

Danelfin, an AI‑driven stock analytics platform, assigns BP.L an AI Score of 3/10 (“Sell”), estimating only a 36% probability of beating the STOXX 600 over the next three months, about 13.5 percentage points worse than the average European stock in its universe. ^[32]
ValueInvesting.io uses several discounted cash flow approaches and, as of 5 December 2025, pegs BP’s “intrinsic value” at roughly 285p per share versus a market price around 458p, implying the stock is about 38% overvalued on its DCF assumptions. ^[33]

In less model‑heavy commentary, UK retail‑investing sites like The Motley Fool have highlighted that some analysts see a long‑term bull case where BP’s share price could climb toward 850p by the end of 2026 – nearly 90% above current levels – if everything goes right on margins, buybacks and capital discipline. ^[34]

So, depending on which framework you like, BP is either:

A solid, high‑yield value play trading at a discount to its long‑run earnings power,
Or a stock that has already priced in much of the good news and now carries downside risk if commodity prices, volumes or capital discipline disappoint.

The current investment narrative: bull vs bear cases

Bullish arguments

Supporters of BP stock heading into 2026 typically point to:

High shareholder yield
Between a dividend yield around 5–6% and buybacks in the mid‑single digits as a percentage of market cap, BP is currently returning at or near double‑digit percentages of its equity value to shareholders each year. TS2 Tech+1
A still‑supportive oil demand outlook
Morningstar’s view of 5–10 more years of oil demand growth before a plateau gives integrated majors like BP breathing room to harvest cash and reshape portfolios. ^[35]
Potential value unlock from asset sales
A successful Castrol sale north of $8 billion, combined with the broader $20 billion divestment plan, could accelerate deleveraging, fund more buybacks or finance selective low‑carbon projects with better economics. ^[36]
Activist and M&A optionality
Elliott’s stake and pressure for higher free cash flow, plus earlier news that Shell had at least studied a potential takeover of BP, keep a layer of strategic optionality in the background – even if a full‑scale merger remains unlikely in the near term. ^[37]
Improved execution
The Q3 earnings beat, stronger refining margins and rising cash flow at mid‑$60 oil suggest BP has structurally improved its cost base and portfolio quality since the pre‑COVID era. TS2 Tech+1

Bearish arguments

Sceptics, on the other hand, stress:

Overvaluation on some models
DCF tools like ValueInvesting.io and AI ranking systems like Danelfin both flash caution, flagging BP as either overvalued or statistically unlikely to beat the broader market over the next few months. ^[38]
Energy transition back‑tracking risk
Cancelling major hydrogen projects in Teesside and Oman may bolster near‑term returns, but it could also erode BP’s ESG credentials, make it harder to attract some pools of capital and leave the company more exposed if policy or technology shifts accelerate. ^[39]
Commodity and macro volatility
The bullish case leans heavily on oil prices hovering at or above the $60–65 range. A global downturn, aggressive supply growth, or rapid demand erosion could quickly compress margins and stress the current capital‑return promises. ^[40]
Regulatory and political risk
From opposition to pipeline rule changes in the U.S. to shifting land‑use priorities in the UK, BP repeatedly finds itself on the front line of regulatory debates, which can add unexpected costs or derail projects. ^[41]
Execution complexity
Running a globe‑spanning portfolio of refineries, pipelines, LNG, retail marketing, wind farms, and (sometimes) hydrogen projects is inherently messy. Operational hiccups like the Olympic Pipeline leak show how quickly local issues can become national headlines. TS2 Tech

What it all means for BP stock on 5 December 2025

As of 5 December 2025, BP is essentially a high‑cash‑yield, moderately‑valued oil major that is:

Turning the dial back toward hydrocarbons and away from some of its more ambitious hydrogen bets,
Testing the market for non‑core assets like Castrol,
Showering shareholders with dividends and buybacks,
And operating in a world where oil demand looks resilient for another decade, but where the long‑term decarbonisation trend is undeniable. ESG Today+3TS2 Tech+3Rigzone+3

Analysts’ published targets mostly suggest single‑digit to mid‑teens percentage upside from current prices, with the more exuberant scenarios – like an 850p share price by 2026 – requiring a lot to go right on both commodities and execution. ^[42]

From here, the key variables for anyone following BP will be:

Whether the Castrol deal is completed and how the proceeds are used,
How far BP continues to dial back or reshape its low‑carbon strategy after the Teesside and Duqm cancellations,
And whether oil prices and refining margins stay close enough to Morningstar’s $65 “mid‑cycle” world to keep the cash machine whirring. ^[43]