We recently published a list of the 10 Best Oil Stocks to Invest in According to Billionaires. In this article, we are going to take a look at where Valero Energy Corporation (NYSE:VLO) stands against other best oil stocks.
After an encouraging start to the year, the energy sector is once again lagging behind the overall market. At the time of writing this piece, the broader energy sector has slid by almost 8.2% since the beginning of 2025, against declines of around 7.9% by the wider market. The principal reason behind this fall is the decline in the global prices of oil, which have plunged by almost 14.5% since the beginning of the year.
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The continued uncertainty surrounding the ongoing tariff war and the recent decision by OPEC+ to increase supply in May have taken a toll on the global price, with the West Texas Intermediate (WTI) crude price now hovering around a 3-year low of $61.5. The US Energy Information Administration (EIA) has forecasted WTI price to average $63.88 per barrel for 2025 before dropping to an average of $57.48 next year. Such a sharp decline in prices could threaten US oil production growth this year. According to data from the Federal Reserve Bank of Dallas, the US oil industry needs prices between $61 and $70 per barrel to be profitable.
The escalating trade tensions between the US and China have also raised the prospect of a global economic slowdown, potentially leading to a lower-than-forecasted consumption of oil. In its latest report, the EIA now expects global oil consumption to increase by 900,000 b/d in 2025 and 1 million b/d in 2026, down by 400,000 b/d and 100,000 b/d, respectively, from its initial forecast last month. The decrease in demand, coupled with increasing production, will continue putting pressure on crude prices, forcing many industry players to cut back activity to maintain investor payouts.
The American oil and gas sector is also frustrated by the back and forth trade policies of President Trump and is questioning how they align with his ‘drill, baby, drill’ mandate to further boost production. According to a survey by the Federal Reserve Bank of Dallas, nearly a third of oil executives have stated that their business outlook has worsened since the end of 2024. Moreover, the imposition of the 25% tariff on steel and aluminum has already led to an estimated 4% increase in costs for drilling a well.
The pressing issues surrounding the global oil trade have forced the industry to shift focus to its second major source of revenue – natural gas. In contrast to oil, the benchmark US natural gas price at Henry Hub has surged by more than 123% since last year and by almost 18% since the beginning of 2025. The uptick comes as a result of slowing output in 2024, booming LNG exports, and fast-depleting inventories during the coldest winter in six years. Moreover, natural gas has emerged as a leading candidate to power the ongoing AI boom and its accompanying data centers, with many providers now even aiming to surpass utilities and supply directly to these power-hungry facilities.
Also, despite the broad concerns, many billionaires continue to invest and remain bullish on the oil sector. A great example is how Warren Buffett’s Berkshire Hathaway maintains significant holdings in multiple oil majors and even recently invested hundreds of millions of dollars in an oil and gas giant over the last few months.
Massive storage tanks filled with crude oil and diesel fuels at an oil refinery.
Our Methodology
To collect data for this article, we scanned Insider Monkey’s database of billionaires’ stock holdings and picked the top 10 companies operating in the oil sector with the highest number of billionaire investors in the Insider Monkey database in Q4 of 2024. When two or more companies had the same number of billionaires backing them, we ranked them by the revenue of their last financial year. Following are the Best Oil Stocks According to Billionaires.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Valero Energy Corporation (NYSE:VLO)
Number of Billionaire Holders: 14
Next on our list of the Best Oil Stocks According to Billionaires is Valero Energy Corporation (NYSE:VLO), the largest independent petroleum refiner in the world that boasts 15 refineries in the US, Canada, and the UK, and a total throughput capacity of approximately 3.2 million barrels per day.
Valero Energy Corporation (NYSE:VLO) had a strong Q4 2024, as its adjusted EPS of $0.64 was significantly above expectations by $0.58. The company’s revenue of $30.76 billion also topped estimates by $733.14 million, despite being down 13.15% YoY. Refining, Valero’s largest segment, witnessed a significant decline in operating income, reporting $437 million in Q4 2024 against $1.6 billion the previous year. However, the renewable diesel segment stood out, with its operating income rising to $170 million, up 102% YoY, partly due to amplified sales volumes and better margins. Despite the issues, VLO returned $4.3 billion to stockholders in 2024 and increased its quarterly cash dividend by 5.6% in January, underlining its commitment to return value to shareholders.
Valero Energy Corporation (NYSE:VLO) expects capital investments of approximately $2 billion in 2025, with a focus on growth and sustainability. The company completed a strategic project to boost renewable energy production in Q4 2024, enhancing its Diamond Green Diesel joint venture. VLO expects the sales volumes of its Renewable Diesel segment to be approximately 1.2 billion gallons in 2025.
Overall, VLO ranks 5th on our list of the best oil stocks to invest in according to billionaires. While we acknowledge the potential of VLO to grow , our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than VLO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.