Three Energy Stocks Built For A New Energy Era

Two wars—Ukraine and Iran—have spotlighted how interdependent the global energy system is, and how easily it can be pushed off balance. The warring parties have focused on attacking and destroying energy infrastructure.

The effects on the global energy system have been profound. Russia was a major exporter of crude oil and fuels; it is not anymore. Western Europe got most of its natural gas from Russia; it isn’t anymore.

Roughly a fifth of crude oil and LNG previously passed through the Strait of Hormuz. The strait was closed for six months, and the cargo now moving through it is still well below pre-war levels.

This means we need to think about several significant changes in terms of how the world acquires the energy it needs.    

The closure of the Strait of Hormuz is prompting countries to rethink where they source oil from. It’s no longer just about the cheapest source; it’s also about supply reliability. Qatar’’s LNG will be offline for many months as facilities are repaired.

Ukraine has attacked Russian energy infrastructure as part of its war operations. Ukrainian drones can now reach deep into Russia. Refineries have been hit, and Russia is experiencing fuel shortages and has now stopped exporting. Russian natural gas no longer reaches Western Europe, forcing the region to bid for LNG cargoes.

Due to climate regulations, Western Europe has lost about 30% of its refineries since 2000. The region imports about 50% of its total diesel fuel consumption.

These factors make the U.S. the world’s go-to source for oil, fuels, and natural gas.    

As the world’s largest crude oil producer, the U.S. produces more crude than it consumes. Energy companies can source cheaper foreign oil for our refineries and sell produced oil overseas at higher prices. The financial news rarely discusses the ability to arbitrage oil prices.

U.S. refiners can produce enough gasoline, diesel, and jet fuel to meet domestic demand and still have extra to export. Diesel fuel supply has become a global issue, and U.S. refiners are making record profits.

The U.S. also produces huge amounts of cheap natural gas. Asian and European buyers are bidding up prices for cargoes of U.S.-produced LNG.

If you’re looking to trade on the current situation in the energy sector, upstream energy stocks like Devon Energy (DVN) let investors profit from growing production and higher prices. You might also consider taking a look at the refining company, Valero Energy (VLO). Or, if natural gas is more interesting to you, Venture Global (VG) is an LNG producer that came to market with a January 2025 IPO.