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Oil prices continue to swing wildly as the Middle East conflict impacts shipments through the Strait of Hormuz. You’ve probably noticed this in BP and Shell, but some unlikely penny stocks have been affected too.
One in particular is Quadrise (LSE: QED), a tiny Londonâlisted technology company aimed at reducing carbon emmissions. The stock is up 50% over the past month and continues to climb even as oil prices slump.
Could this be an opportunity for early investors to get involved in a much-needed energy transition?
Why energy needs a makeover
The recent Hormuz closure sent Brent crude soaring by double digits, before crashing again on the news of a ceasefire. Now itâs partially open but the situation could change quickly, so investors cannot assume the crisis is over.
These price swings highlight a problem the world has known about for years: the global economy is too dependent on oil. When supply looks shaky, everything from airline tickets to home energy bills can increase drastically.
Energy alternatives are often touted mainly on climate grounds but energy security is rapidly becoming a more pressing argument. If heavy industry, shipping and power generation can switch to a wider range of fuels, the risk from any single chokepoint is lower.
Where Quadrise plays a part
Quadrise looks on track to become a critical part of the energy transition. It develops ‘oilâinâwater’ emulsion fuels that can replace conventional heavy fuel oil in large engines and boilers.
These fuels mix heavy oil or bioâbased feedstocks with water and special chemicals to create a fine emulsion. This burns more cleanly and efficiently than standard fuel oil.
The latest sustainability report stresses a focus on decarbonising shipping and heavy industry, with trial projects planned or under way in Europe, the Americas and North Africa.
Engine tests have shown that MSAR and bioMSAR can run in existing equipment at high loads, which is crucial if big fleet owners are to consider switching.
The finances behind the story
Financially, Quadrise is still very much an earlyâstage, speculative play. Recent data suggest annual revenue of only around £40,000 and a market value just above £50m. Like most penny stocks, this is a bet on future success rather than current earnings.Â
Recent losses have improved from about £4.84m in 2020 to roughly £3.1m in 2025, driven by cost control as projects move from pure development toward field trials.
The balance sheet is relatively clean, with equity of about £7.82m and very little debt, but cash reserves are modest at around £3.9m, so further funding could be needed if revenues do not ramp up quickly.
Risks to consider
Quadrise is a penny stock with a small market capitalisation and limited trading volume, so the share price can be highly volatile. It depends on successfully completing commercial trials with large partners and then signing longâterm supply or licensing deals.
Any delays, cancellations or technical setbacks could negatively impact the share price.
Encourangingly, it recently renewed its exclusive supply and collaboration agreement with specialtyâchemicals group Nouryon, securing access to key emulsifier chemicals and shared intellectual property.
For British investors with a 10-20 year outlook, it can be tough to envision where it fits within a portfolio. But for those that believe the energy transition has legs, I think itâs worth considering.
The post Up 50% in a month! Meet Quadrise, the soaring UK penny stock that offers an alternative to oil appeared first on The Motley Fool UK.
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Mark Hartley has positions in Bp P.l.c. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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