Investors in oil stocks are navigating turbulent waters as geopolitical events and market dynamics continue to create uncertainties. CNBC’s Mad Money host, Jim Cramer, recently raised questions regarding the current investment climate for oil-related assets, sparking heated discussions across financial communities.
Trump’s Push to Lower Oil Prices
Former President Donald Trump’s efforts to bring oil prices down, reminiscent of his strategies in 2016, have reignited debates on the viability of oil stock investments. In a now-viral post on social media, Cramer questioned the rationale behind increased oil stock purchases under these circumstances: “Can anyone explain to me why people bought the oil stocks yesterday when, like 2016, Trump is trying to bring down the price of oil?”
The context for this query stems from Trump’s reported plans to utilize Venezuelan oil reserves as a means to pressure U.S. crude prices toward $50 a barrel. Coupled with Venezuelan President Maduro’s recent capture, this strategy may significantly alter global oil supply chains. However, Trump’s approach has drawn skepticism due to the complexities of reviving Venezuela’s oil production capabilities, which have been plagued by underinvestment, sanctions, and mismanagement over the years.
The Risks of Betting on Oil Stocks
Cramer has consistently cautioned investors about oil stocks, particularly during late-cycle rallies. He highlighted on his show that recent spikes in oil stock prices might expose buyers to risks if Venezuela significantly ramps up production. The country holds the largest proven crude reserves globally, and should production return to pre-sanction levels, the United States may see a notable supply surge that could drastically suppress oil prices.
Cramer stated: “You might’ve decided it’s time to own an oil producer because our government now seems to be in control of Venezuela, or at least its petroleum. That was a mistake. If Venezuela boosts output dramatically over the next 18 months, the price of crude is going to get slaughtered.”
Global Oil Markets Under Pressure
It’s worth noting that crude prices suffered a 20% decline in 2025—the sharpest annual drop since the COVID-19 pandemic. Trump’s strategy to create a Western Hemisphere energy bloc, limiting Russian and Chinese access to Venezuelan oil, may bring competitive geopolitical advantages but also disrupt existing markets and investment strategies.
While U.S. companies such as Chevron (NYSE: CVX) are positioned to potentially revive Venezuela’s oil infrastructure, they remain cautious. Investments of this scale would require robust assurances from the U.S. government, highlighting the intricate balance between policy and market forces.
Investing Wisely
For those seeking alternatives to traditional oil stocks, consider exploring energy-focused Exchange-Traded Funds (ETFs) that diversify exposure across various sectors or renewable energy investments that align with global sustainability trends. Platforms like eToro offer access to ETFs, allowing investors to trade stocks and other assets seamlessly while aligning with evolving energy trends.
As the global oil market navigates these challenges, staying informed and adopting a diversified investment approach will be critical for minimizing risk.
