Energy Stocks Defy Turmoil as Trump Tariffs Rattle Markets

The latest round of tariffs announced by President Donald Trump shook global markets, reigniting concerns about an economic downturn. Trump’s stance includes a 10% baseline tariff on most U.S. imports, with increased duties on major trade allies, including China and the EU. This policy shift has already sent ripples through the commodities market, driving down oil, copper, and agricultural prices as worries about weaker global demand mount

However, amid all this economic uncertainty, the energy sector has proven to be a standout performer. While broader equity markets, including the S&P 500, have stumbled, falling more than 4% year to date, the energy sector has remained resilient, posting gains of around 10% in 2025. This impressive performance highlights the strength of energy stocks like ExxonMobil XOM, Chevron CVX and Devon Energy DVN, which have shown remarkable stability in an otherwise turbulent market.

Tariffs, Oil Demand and Supply Constraints

While the tariffs could weigh on global economic activity and reduce oil demand, they also have the potential to tighten supply. Trump's warning of additional sanctions on nations buying Venezuelan crude could tighten global oil supply even further. Venezuela’s oil exports are already under pressure due to the ongoing U.S. sanctions, but any additional restriction on buyers could push supply down even further.

Iran, too, remains under the United States’ "maximum pressure" campaign, with sanctions continually expanding to limit its oil trade. These geopolitical hurdles, along with the latest restrictions on Russian oil exports, further complicate the global energy landscape. The outcome is a potentially optimistic scenario for crude oil, which is currently holding steady at a relatively healthy $70 per barrel.

Energy Sector’s Strength Amid Market Weakness

Investors searching for stability should recognize that energy has been one of the few bright spots in the market. While this year has seen inflationary pressures and recession fears battering the tech and consumer sectors, major energy stocks have emerged as a safe haven for investors. This outperformance can be attributed to disciplined capital spending, increased shareholder returns, and the sector’s ability to navigate geopolitical uncertainties better than most industries.

Although tariffs raise concerns about slowing growth, oil companies continue to benefit from tight supply fundamentals. The OPEC cartel remains cautious with production increases, and with major producers like Russia and Venezuela facing constraints, oil prices are likely to remain well-supported in the near term.

3 Stocks to Keep in Your Portfolio

For now, energy remains a compelling sector to watch. The geopolitical landscape suggests that supply-side constraints will continue to support oil prices, while major energy firms have proven their ability to weather economic storms. Defensive, dividend-paying energy stocks offer a strong hedge against broader market volatility, making them a worthy consideration for investors seeking stability in these uncertain times. Holding onto stocks like ExxonMobil, Chevron, and Devon Energy in the current environment could be a prudent strategy as global trade tensions evolve. They have delivered year-to-date gains of 10.4%, 15%, and 15.9%, respectively. Notably, each of the three stocks currently carries a Zacks Rank #3 (Hold), reflecting their solid positioning in the energy sector. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

XOM, CVX and DVN Year-to-Date Stock Performance

ExxonMobil: It is one of the largest publicly traded oil and gas companies in the world with operations that span almost every corner of the globe. Spring, TX-based ExxonMobil is fully integrated, meaning it participates in every aspect related to energy — from oil production, to refining and marketing. ExxonMobil rewarded investors with record shareholder returns, distributing $36 billion in 2024 through dividends and buybacks. It generated $36.2 billion in free cash flow, enabling these payouts without increasing debt. The company has now increased its annual dividend for 42 consecutive years. Its quarterly cash dividend of 99 cents translates to an annualized yield of 3.3%.

Chevron: Chevron is well-run and historically a profitable big oil giant. Chevron’s upstream portfolio remains a key strength, with strong production growth from the Permian Basin and Kazakhstan. The company is targeting a 6% annual production increase through 2026, with high-margin projects driving long-term value. Chevron continues to be a strong dividend player, having increased its payout for 37 consecutive years. The latest dividend hike of 4.9% takes its yield to over 4%, making it a reliable income source for long-term investors.

Devon Energy: Devon Energy is an independent energy company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The company’s assets are spread across Delaware Basin, Eagle Ford, Anadarko Basin and Powder River Basin. The assets DVN owns have significant long-term growth potential. The company continues to expand its holdings through strategic acquisition. As far as shareholder wealth is concerned, Devon Energy’s management raised quarterly dividend by 9% for the first quarter of 2025. The new quarterly rate is 24 cents per share, which yields 2.6%.

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