Shell is currently examining the possibility of acquiring BP, yet no decision has been made on whether to move forward. This evaluation is in its preliminary stages, focusing on the feasibility and potential benefits of such a merger. Shell's market capitalization stands at approximately £149 billion, which is nearly double that of BP, highlighting the scale of this potential deal.

In the context of strategic priorities, Shell's CEO Wael Sawan has emphasized a preference for share buybacks over pursuing major acquisitions, focusing on improving internal operations instead. On the other hand, BP is taking steps to stabilize its financial footing with a plan to sell $20 billion in assets by 2027 and has recently reduced its share buyback activities. Regulatory challenges are anticipated if Shell proceeds with the acquisition due to potential concerns over market dominance.

Additionally, investor dynamics play a role, with activist investor Elliott Investment Management raising its stake in BP to over 5%, pushing for strategic adjustments to boost cash flow. Reuters reported that Shell might delay any acquisition action until BP itself shows interest in talks, or another bidder steps forward. This cautious approach indicates Shell is also considering multiple market factors before making any definitive moves.