LIVE MARKETS-Citi: energy stocks aren’t just about the oil price

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CITI: ENERGY STOCKS AREN’T JUST ABOUT THE OIL PRICE

As energy shares surge, investors keep asking the same question: what oil price are these stocks now pricing in? Citi says that question misses the point.

According to analyst Alastair Syme, energy equities have repeatedly moved independently of crude prices. Oil was essentially flat between 2008 and 2014, yet energy shares fell around 30%.

In contrast, oil prices dropped roughly 20% in 2025, but energy stocks still ended the year higher. The message, Citi argues, is that oil prices alone do not explain how the sector trades.

“We challenge the central premise behind the question that energy equities are simply a proxy for oil prices,” Syme said.

Instead, Citi looks at long‑term growth assumptions. Integrated oil companies are priced for terminal growth of just 0.5% a year, well below the 1.4% trend growth in global oil and gas demand.

Recent geopolitical tensions, Citi says, underline a reality markets continue to underestimate: oil and gas remain essential to the world's economy.

"One lesson for the market should be a reminder of the criticality of oil and gas for the global economy, a relationship that many investors chose to ignore during the hubris of 'energy transition' in 2021/22".

(Danilo Masoni)

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