The fortunes of companies in the alternative energy sector crushed Big Oil shares last year. The leadership shift in favor of various slices of so-called clean energy shares surprised some market observers. The Trump administration, after all, hasn’t been shy about favoring the fossil fuels industry and changing the regulatory landscape toward that end. But in recent days Big Oil has found a second wind after lagging in 2025. Investors are now wondering: Was last year’s rebound in alt energy a one-off?
It’s still early in the year and so the rebound in Big Oil lately could be noise. Nonetheless, the surge in the likes of and this year are striking after a lackluster run in 2025.
An ETF proxy () for Big Oil is up 19.1% so far this year (through Feb. 6), or more than double the fund’s modest 7.9% increase for all of 2025. By comparison, the is up 13.2% year to date, which follows the fund’s sizzling 47.0% surge in 2025.
What’s changed to turn the tables on the clean energy recovery? In a word, Venezuela. After the US captured the country’s leader, Nicolás Maduro, last month and President Trump outlined plans to control Venezuela’s oil industry, the headlines have persuaded investors that a new era may be dawning for fossil fuel companies in the Western Hemisphere.
Although there are many risks ahead, Venezuela’s potential as an energy source is impressive, if only on paper so far. The country holds the world’s largest proven oil reserves, albeit in heavy crude deposits, which require costly processing compared with, say, Saudi Arabia’s light, sweet crude.
The bigger challenge: the long-running decay in Venezuela’s oil-industry infrastructure will take years to repair at a cost of many billions of dollars. ExxonMobil CEO Darren Woods told President Trump last month that Venezuela is “uninvestable.”
At the moment, Chevron is the last US oil firm still operating in Venezuela, but the Trump administration is working to smooth the path to incentivize more US oil companies to invest in the country. “The President’s team is working around the clock to ensure oil companies are able to make investments in Venezuela’s oil infrastructure. Stay tuned,” White House spokeswoman Taylor Rogers said in a statement last week.
How much of an opportunity Venezuela represents to Big Oil is still an open question. There are still many unanswered questions for a recovery that, even under the best of scenarios, will take years, given the deterioration that’s unfolded in the country oil infrastructure.
There’s also a tangle of unresolved legal issues. As Energy Intelligence Group, a consultancy, observes:
For international oil companies, service providers and financiers, a key question is whether Venezuela’s unresolved liabilities can be reconciled in a way that doesn’t dissuade potential new investment in a country that boasts the world’s largest oil reserves but requires massive outlays to revive its moribund energy infrastructure.
Considering the big picture, there’s still plenty room for debate about whether the Venezuela factor has materially altered Big Oil’s fortunes from an investment perspective. The 2025 leadership shift in favor of alternative energy companies has taken a hit so this year, but that could be noise. For a clearer view of the trend, it’s helpful to monitor how XLE, the Big Oil ETF proxy, fares against its clean-energy counterpart (ICLN).
As the chart above highlights, Big Oil’s strong run so far this year has yet to make a convincing dent in the trend bias that switched in 2025 in favor of clean energy shares.
Is the Venezuela factor a temporary bump that will fade as the messy details of rebuilding the country’s oil business become clearer? The alternate view is that Big Oil is on the cusp of a new era of opportunity. Maybe, but for the moment, the trend chart above suggests the market has yet to reverse its clean-energy bet.