Jasmine Birtles
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5 Best UK Energy Stocks to Watch Right Now (July 2026)
Ruby Layram
15th Jul 2026
Oil prices have jumped sharply this week after fresh tensions between the US and Iran rattled shipping routes through the Strait of Hormuz, and UK energy stocks are feeling the effects. Brent crude has climbed as high as $87 a barrel, up around 20% from its low earlier this month, and BP has led the FTSE 100 risers as a result.
If you’ve been wondering whether energy stocks deserve a place in your portfolio, you’re not alone. In this guide, we’ll break down five UK-listed energy companies that are getting attention right now, explain why they’re in the spotlight, and flag the risks worth knowing before you buy.
As always, start small, do your research, and remember investing is a marathon, not a sprint.
Why Are UK Energy Stocks in the News?
When oil prices rise, energy companies that produce and sell oil and gas tend to make more money on each barrel, which can push their share prices up. Right now, prices are climbing because of the conflict near the Strait of Hormuz, a narrow shipping channel that a huge chunk of the world’s oil passes through.
When there’s a risk that oil can’t move freely through it, prices spike on fears of a supply crunch.
That’s why BP and Shell, the UK’s two energy giants, have been among the best-performing FTSE 100 shares this week, and why smaller North Sea producers are also catching investors’ eyes.
Quick jargon-buster: a “barrel” is the standard unit oil is priced in (about 159 litres). The “FTSE 100” is an index of the UK’s 100 biggest listed companies. “Dividend yield” is the annual dividend payment expressed as a percentage of the share price, a rough guide to the income a share pays out.
5 UK Energy Stocks Investors Are Watching
1. BP
BP is one of the world’s biggest oil and gas “supermajors,” with operations spanning exploration, refining, and renewables.
It topped the FTSE 100 leaderboard this week, with shares climbing as higher oil prices are expected to add well over a billion pounds to its next quarterly earnings.
Why it’s relevant now: BP has direct exposure to crude prices, so it tends to move quickly when oil spikes.
Key risk: what goes up can come down fast, if tensions ease and oil prices fall back, BP’s shares could give up recent gains just as quickly.
2. Shell
Shell is the UK’s largest company by market value and, like BP, benefits when oil and gas prices rise. It’s also just upgraded its gas production forecasts, giving it a second tailwind alongside the oil price move.
Why it’s relevant now: strong cash generation means Shell has historically supported its share price with dividends and buybacks.
Key risk: Shell’s size means big swings in energy prices move a huge amount of value, so it’s not a “set and forget” holding, it needs monitoring.
3. Harbour Energy
Harbour Energy is the largest independent oil and gas producer in the North Sea. It’s been rewarding shareholders with a meaningful dividend and has been highlighted by analysts as having room to grow.
Why it’s relevant now: as a pure-play North Sea producer, it’s highly sensitive to oil and gas price moves, arguably more so than diversified majors like BP or Shell.
Key risk: North Sea production is a maturing, high-cost basin, and it’s also exposed to UK energy taxation policy, which has changed several times in recent years.
4. Serica Energy
Serica is a smaller North Sea gas and oil producer known for a generous dividend policy funded by strong free cash flow.
Why it’s relevant now: it offers more concentrated exposure to UK gas prices, which tend to move alongside broader energy market jitters.
Key risk: smaller companies like Serica can be more volatile than the big multinational players, and their fortunes are tied closely to a handful of fields.
5. Ithaca Energy
Ithaca Energy is another significant North Sea operator with a mix of oil and gas assets and a dividend-focused approach.
Why it’s relevant now: like its North Sea peers, it stands to benefit from higher energy prices and has been flagged by analysts alongside Harbour and Serica as offering attractive total return potential.
Key risk: as with any single-region producer, it’s exposed to North Sea-specific risks including regulation, decommissioning costs, and field depletion over time.
What to Do Next
- Don’t chase the spike. Buying a stock purely because it’s jumped this week is risky, prices driven by geopolitical headlines can reverse just as fast as they rose.
- Think about diversification. Rather than picking a single energy stock, consider whether a broad energy or commodities ETF might give you exposure without putting all your eggs in one basket.
- Use a tax-efficient wrapper. If you’re investing through a Stocks and Shares ISA, any gains are free from UK Capital Gains Tax, which is worth factoring in before you buy outside one.
- Check the dividend is sustainable. A high dividend yield can be tempting, but always check whether it’s supported by genuine free cash flow rather than borrowing.
- Keep position sizes sensible. Energy stocks can be volatile, most beginner portfolios are better served by keeping any single sector to a modest slice of the total, rather than going all-in.
Final Thoughts
UK energy stocks are having a moment thanks to the oil price spike linked to US-Iran tensions, but “in the news” doesn’t automatically mean “right for your portfolio.” Do your own research, understand what you’re buying, and think about how any single stock fits into your wider investment strategy.
This article is for general information and educational purposes only and is not regulated financial advice. The value of investments can go down as well as up, and you may get back less than you invest. If you’re unsure, speak to a regulated financial adviser before making investment decisions.
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