Energy stocks are holding up amid the trade chaos, with the benchmark S&P 500 Energy Index down -4.65% year to date but up 5.63% over the past month. Comparably, the S&P 500 index stands at -3.70% year to date in what’s been a rough year for most stocks.

Still, energy stock valuations remain low, and the Trump administration has treated the oil and gas sectors favorably in its first 100 days – both of which are good news for sector stocks.

That’s not to say there aren’t worrisome issues for the energy sector.

The YChart energy index shows prices are down to 87.87 compared to 95.06 in April and 109.59 a year ago. OPEC and other major oil producers are expected to boost production again starting in June. In a recent research note, Goldman Sachs analyst Callum Bryce said its oil price forecast “remains to the downside,” citing recession risks and lower production capacity. While the tariff wars haven’t hurt the energy sector as severely as others, the costs of oil and gas production, refining, and transport are rising at a time when prices are lagging.

In its most recent Letter to Stockholders, outgoing Diamondback CEO Travis D. Stice said the oil industry is facing lower demand and higher supply, has lowered oil prices and increased volatility, “with massive industry changes on the horizon.”

“Over the past decade, the cost of supply for the average barrel of oil produced in the United States has increased. The shale revolution has evolved from proof of concept to manufacturing mode and is now in a more mature stage of development, providing (free cash flow generation and return of capital),” Stice stated.

“Today, geologic headwinds outweigh the tailwinds provided by improvements in technology and operational efficiency,” he added. “On an inflation-adjusted basis, there have only been two quarters since 2004 where front-month oil prices have been as cheap as they are today (excluding 2020, which was impacted by the global pandemic). Therefore, we believe we are at a tipping point for U.S. oil production at current commodity prices.”

Still, there are promising signs. Energy stocks still trade at low valuations, and the Trump administration has treated the industry favorably.

“Energy is an industry that never sleeps,” said Adam Ferrari, CEO at Phoenix Energy. “Right now, the sector is in a state of strategic recalibration as a response to broader headwinds like inflation, trade imbalances, and geopolitical instability influencing cost structures.”

Additionally, political measures like President Trump’s executive orders surrounding energy security bolster fossil fuel development more broadly. “Still, companies need to include uncertainties in their plans for capital deployment and resource allocation in the future.”

Technology advancements are also working in the energy sector’s favor.

“The energy industry is undergoing significant changes due to multiple factors, including the rise of artificial intelligence and the massive building of infrastructure and the power requirements needed for data centers to operate which has the tech, and utilities sectors scrambling to meet the need,” said Chris Cook, Senior Equity Trader and Research Analyst at Frost Investment Advisors.

Those advancements should boost some energy suppliers more than others.

“These new opportunities are still in the beginning stages, and we expect more will develop as AI technology continues to evolve, making this a long-term investment theme over the next ten years or more,” Cook said. “Based on the advantages of access, availability, and reliability, we expect to see natural gas generation as an ideal fuel and power source to help close the demand gap, especially within Texas.”

Three Energy Stocks To Play In A Roiling Market

With enough moving parts to equip a Permian Basin oil rig, some high-value and high-dividend-paying energy stocks are worth looking at now. These three names could boost a dormant 2025 investment portfolio.

Marathon Petroleum

Marathon Petroleum (NYSE:MPC) is on the move, with its share price up 22% over the past month alone. In its most recent quarterly report, the company announced revenues of $31.85 billion, well ahead of analyst expectations of $1.7 billion. Analysts are essentially backing MPC, with Scotiabank issuing a buy rating on MPC while Bank of America is keeping a hold on the stock. MPC also offers a healthy 2.67% dividend yield, with the company reporting it would hold a 0.91% quarterly dividend, which should satisfy income-minded shareholders.

Schlumberger Ltd.

Schlumberger Ltd. (NYSE:SLB), a Houston-based energy technology company, has seen its shares fall by 10% year-to-date, but there’s a lot to like about the stock. Eight of nine analysts surveyed by Benzinga are either “bullish” or “somewhat bullish” on the stock, with a consensus target price of $50.4 per share. In a recent statement, SLB said it would boost shareholder returns to $4 billion in 2025. SLB stock currently clocks in with a robust 3.31% dividend yield.

Kinder Morgan

Natural gas has been an energy industry stalwart, which is a big reason why the sector generated an 11.08% annualized return over three years and a 31.58% annualized return over the five years ending March 31, 2025, according to a recent US Bank research note.

“Rising natural gas prices are the biggest driver of energy sector performance,” says Rob Haworth, senior investment strategy director with U.S. Bank Asset Management Group. “Natural gas companies comprise about 30% of the sector’s S&P 500 index. In early 2025, natural gas prices are significantly higher than they were at the end of 2024. “Demand for liquid natural gas (LNG), particularly from European markets, plays a role in price increases,” says Haworth, noting that European countries are replacing supplies produced in Russia before Russia invaded Ukraine.

Kinder Morgan (NYSE:KMI) fits the bill as a solid natural gas play. The energy company controls 40% of the natural gas transported in the U.S., and it stores and ships about 15% of all US natural gas. The stock is holding steady in 2025 and has returned 43% over the past year. Toss in a hefty 4.30% dividend, and KMI stands out as a stable force in an increasingly unstable energy economy.

Other Energy Plays To Consider

Market mavens are also looking at a handful of other energy stocks worth special attention.

“On the natural gas front, Cheniere Energy (NYSE:LNG) remains a standout given its role in U.S. LNG exports and strong global demand,” said Fabio Ruggeri, founder & CEO of MenthorQ, an AI-powered investment trading platform. “EOG Resources (NYSE:EOG) is a top-tier shale operator with disciplined capital management, while Pioneer Natural Resources (NYSE:PXD) offers solid Permian exposure and attractive shareholder return policies.”

Ruggeri likes the Energy Select Sector SPDR Fund (NYSE:XLE) for a broader play.

“The fund gives diversified exposure to large-cap energy names that could benefit from a cyclical rotation back into value and commodities,” he noted. “With geopolitical instability and policy tailwinds, fossil fuel stocks remain a tactical overweight for many macro investors.”

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Editorial content from our Expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.

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LNGCheniere Energy Inc

$259.531.45%

MPCMarathon Petroleum Corp

$307.272.70%

SLBSLB Ltd

$47.51-0.09%