What’s Happening With Oil Stocks?
For questions about this article or underlying research, email help@trefis.com.
Part of our midterms guide. Start here: what the vote really changes for your money.
Betting markets give Democrats about a 94% chance of winning the House on Tuesday, and about three in four of taking the Senate. Gasoline averaged about $4.27 a gallon in the week of Oct 26, down from $4.35 at the start of the month. High pump prices are a campaign issue. That makes oil companies a target. But a target isn’t the same as a loser.
| Company | Value | 12-month return | Below 52-week high | Exposure to the vote |
|---|---|---|---|---|
| Exxon Mobil (XOM) | $750B | +62% | 4% | Low |
| Chevron (CVX) | $449B | +50% | 3% | Low |
| ConocoPhillips (COP) | $178B | +70% | 5% | Low |
| Occidental (OXY) | $61B | +50% | 7% | Low |
All four sit near their highs. The price of oil put them there, not Congress.
Brent crude went from about $70 a barrel before the Iran war began in late February to above $135 at times, and was still above $115 in late October. That is the whole story of these returns.
See more lines: how we rated exposure
Exposure is our judgment of how much Tuesday’s outcome (not oil prices or politics in general) can change each company’s revenue, costs or taxes. Values and 12-month returns are at the Nov 2 close (Trefis market data). A Democratic House can hold hearings, write budgets and block bills, but can’t pass laws past a veto.
Can Democrats Pass A Windfall Tax?
Not on their own. Sen. Sheldon Whitehouse and Rep. Ro Khanna filed a Big Oil windfall tax in March. It would hit producers of at least 300,000 barrels a day and send the money back to households as rebates. About a dozen senators signed on, and its own sponsor called it “an uphill struggle.” Any bill still needs the President’s signature. A Democratic House can bring it to a vote. It can’t make it law.
Who Actually Controls Oil Stocks’ Biggest Levers?
The executive branch, mostly.
Leases and permits. The Interior Department runs lease sales and drilling permits on federal land and offshore. The 2025 tax law also required a schedule of new lease sales. A Democratic House can complain in hearings. It can’t cancel a sale.
Sanctions and the war. The President sets Iran sanctions and decides war and peace. That moves crude by tens of dollars. Congress moves it by cents.
The pressure campaign. Here’s the twist. The loudest critic of oil profits this year has been the White House. In June, President Trump ordered a Justice Department probe of Exxon and Chevron over pump prices; their shares fell 2% to 3% that day. In August he said they were making “too much money.”
What Could Go Wrong For Oil Stocks?
Peace. If the Strait of Hormuz reopens, crude could fall fast, and stocks priced for $100 oil would follow. That is the biggest risk, and the vote doesn’t decide it.
Refining margins fade. Refining, not crude, carried the third quarter. Chevron’s adjusted profit was $10.4 billion, and Exxon said better refining margins added about $4.5 billion. Margins usually soften after the driving season.
A populist deal in 2027. A President who attacks oil profits and a Democratic House that wants money for health care could find common ground in the 2027 debt-limit talks. A windfall tax or a curb on gasoline exports is a long shot. It isn’t zero.
Has This Happened Before?
Yes, in 2022. Gasoline hit records, Democrats ran Congress and the White House, and windfall-tax bills got filed. None passed. Energy was the best sector in the S&P 500 that year, and Exxon returned about 87%. Talk is cheap. Oil prices did the work.
Low exposure to the vote. High exposure to oil. Democrats can hold hearings and file windfall-tax bills, but can’t pass them past a veto. Leases, sanctions and the war belong to the President. For holders near record highs, the real question is what happens when crude falls, not who runs the House.
For the big picture, see Will The Midterms Move Your Stocks? Sector by sector: Which Sectors Win A Blue Wave Or Split Congress?
What Happens To Your Portfolio If Oil Falls Back To $70?
Elections change the odds, not your plan. If you have $1 million or more invested, see what Tuesday means for your portfolio in a free 15-minute call with a Trefis partner firm.
Spot an error or want more like this? Tell us in 10 seconds.