Have Oil Stock Prices Made Their Own Case for Moving On?
May 9, 2025
Fossil fuel companies haven't performed well in the past decade, let alone since January. The markets have told a clear story - Dropping oil, gas, and coal stocks from portfolios has proven to be a winning investment strategy.
Stock funds that excluded the fossil fuel industry performed noticeably better than those that included fossil fuels over the past decade
Even the biggest American oil companies are lagging since January.
So what's contributing to this? Many factors play a role, and the energy transition might be one as changing policies and growing demand for cheaper, cleaner alternatives create uncertainty about future oil and gas demand.
Rather than investing in more production, oil giants spent tens of billions on stock buybacks in the early 2020s, purchasing their own shares from the market to boost stock prices
The shale revolution of the early 2010s helped companies extract oil and gas much more cheaply, reducing prices and profits. Lately, low oil prices have been the drag on oil stocks.
As uncertainty drives the market, it's the declining performance of fossil fuel companies that has built the strongest case for leaving them behind.
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