Oil prices continue to fluctuate wildly as conflict in the Middle East affects supplies through the Strait of Hormuz. You’ve probably noticed this in BP AND Shellbut it also impacted some unlikely penny stocks.

One of them in particular Quadric (LSE: QED), a miniature technology company listed on the London Stock Exchange that aims to reduce greenhouse gas emissions. The company’s stock has surged 50% over the past month and continues to rise despite falling oil prices.

Could this be an opportunity for early investors to get involved in the much-needed energy transformation?

Why energy needs transformation

The recent shutdown of Hormuz sent Brent crude rising by double digits before falling again on news of the ceasefire. It is now partially open, but the situation can change quickly, so investors cannot assume that the crisis is over.

These price swings highlight a problem the world has known for years: the global economy is too dependent on oil. When supply seems uncertain, everything from airline tickets to home energy bills can boost dramatically.

Alternative energy sources are often touted mainly for climate reasons, but energy security is quickly becoming an increasingly pressing argument. If massive industry, shipping and power generation can switch to a wider range of fuels, there will be less risk from any single bottleneck.

Where Quadrise plays a role

Quadrise is on track to become a key element of the energy transition. It develops oil-in-water emulsion fuels that can replace conventional massive fuel oil in gigantic engines and boilers.

These fuels combine massive oil or bio-based raw materials with water and special chemicals, creating a dainty emulsion. Thanks to this, it burns cleaner and more efficiently than standard heating oil.

The latest sustainability report highlights a focus on decarbonising shipping and massive industry, with trial projects planned or underway in Europe, the Americas and North Africa.

Engine testing has shown that MSAR and bioMSAR can operate in existing equipment under massive loads, which is crucial if gigantic fleet owners are considering a change.

The finances behind the story

Financially, Quadrise is still largely an early-stage speculative play. The latest figures suggest annual revenues are only around £40,000, with a market value of just over £50 million. Like most penny stocks, it’s a bet on future success, not current profits.

Recent losses have reduced from around £4.84m in 2020 to around £3.1m in 2025, driven by cost controls as projects move from pure development to field trials.

The balance sheet is relatively neat, with equity of around £7.82m and very little debt, but cash reserves are modest at around £3.9m, so unless revenues pick up quickly, further financing may be required.

Risks to consider

Quadrise is a penny stock with a tiny market capitalization and circumscribed trading volume, so the share price may be highly volatile. This involves successfully completing commercial trials with gigantic partners and then signing long-term supply or licensing agreements.

Any delays, cancellations or technical failures could have a negative impact on the share price.

Interestingly, it recently renewed its exclusive supply and collaboration agreement with specialty chemicals group Nouryon, providing access to key chemical emulsifiers and shared intellectual property.

With a 10-20 year horizon, it may be challenging for UK investors to imagine where this fits into their portfolio. But for those who believe the energy transition has legs, I think it’s worth considering.