BP (LSE:BP) i Shell (LSE: SHEL) shares are currently in demand. With the price of oil soaring due to events in Iran, they look like obvious beneficiaries. But investing is never that straightforward. Is there a hidden risk that we have missed?

As a rule, the rising price of oil is beneficial for energy companies. At the beginning of the crisis, the price of Brent crude oil was just over $60. Today it is $114. Analysts say it could exceed $120 if the war drags on. So how did BP and Shell shares react?

Since the war began on February 28, BP’s share price has increased by approximately 20%. Shell is slower, up a modest 7%. Considering we are supposedly facing the biggest energy shock in history, I expected better. Here’s what I think is happening.

Why aren’t FTSE 100 shares doing even better?

First, the higher oil price has not yet translated into profits. BP released the report yesterday, but its first-quarter results ran through March 31, so they only covered the early phase of growth. Second, investors have widely accepted Donald Trump’s assurances that the war is under control. No one wants to bet against BP and Shell only to have the Strait of Hormuz reopened the next day. As a result, their shares will fall.

There is a long-term worry. The oil shock could ultimately impact Big Oil. This could raise taxes on windfall profits and persuade import-dependent countries to accelerate their transition to renewable energy sources. Nobody takes anything for granted. However, one thing is clear. BP and Shell have been great investments recently.

Over the last 12 months, their shares have increased by 60% and 34%, respectively. If an investor had divided a £20,000 stocks and shares ISA equally between them a year ago, their BP shares would have been worth £16,000 and their Shell shares would have been worth £13,400. But that’s not all they have.

BP has a trailing yield of 4.25% and Shell has a trailing yield of 3.25%. This brings their total refund to around £16,425 and £13,725 respectively. In total, the two energy giants turned a £20,000 ISA investment into £30,150 in just one year. This shows the ultimate wealth creation power that stocks have. But can this continue?

They are risky, but are they profitable?

Given today’s high oil price, there is a good chance for more rewards. Yesterday (April 28), BP said underlying replacement cost profit more than doubled from $1.5 billion to $3.2 billion in the first quarter, helped by a busy trading division. However, challenges still exist. Management said net debt increased by $3.1 billion to $25.3 billion: “mainly resulting from lower operating cash flow”. Shell’s debt is even higher, rising from $6.9 billion in 2025 to $45.7 billion. However, it is a larger company with a market capitalization of £184 billion up from £83 billion.

BP is a messier story – it pivoted into renewables, then back out again, encountering management problems along the way. Its shares have lagged Shell for years but are now catching up, which helps explain its recent huge gains.

As always, there are risks. The conflict in Iran is inexplicable. A global recession may hit demand for oil. The United Arab Emirates is withdrawing from OPEC, which could enhance supply and lower prices in the long run. And there is climate change. BP and Shell continue to offer high-risk, high-reward stocks. I think both are worth taking a closer look at for investors who like excitement and dividend income.