The energy sector is splitting in two as 2026 begins, with clean energy stocks extending their rally on artificial intelligence infrastructure demand while traditional oil companies face renewed pressure from falling crude prices. For investors, the divergence creates both opportunities and strategic decisions.

Clean-energy stocks pushed higher in the first weeks of 2026, building on momentum from late 2025 as the market increasingly recognizes the massive power requirements of AI data centers. Meanwhile, oil companies are grappling with crude prices that haven't touched $80 per barrel since summer 2024 and may fall further.

The AI Power Play

The clean energy rally is being driven by one of the most underappreciated aspects of the AI revolution: electricity consumption. Training and running large language models requires enormous amounts of computing power, which translates directly into energy demand.

AI hyperscalers are projected to spend half a trillion dollars on infrastructure in 2026, with a significant portion devoted to ensuring adequate power supply. This spending bonanza benefits multiple segments of the clean energy ecosystem:

  • Solar and Wind Developers: Tech companies are signing long-term power purchase agreements to lock in clean energy supplies.
  • Grid Infrastructure: Transmission and distribution upgrades are essential to connect new data centers to power sources.
  • Energy Storage: Battery systems provide the reliability that data centers require around the clock.
  • Nuclear Resurgence: Several tech giants have announced nuclear power investments, viewing atomic energy as a reliable, carbon-free baseload option.

Oil's Challenging Outlook

On the other side of the energy ledger, oil faces a difficult 2026. The Energy Information Administration expects Brent crude to fall toward an average of $55 per barrel within the first quarter and remain at that depressed level throughout the year. WTI prices would move in tandem, settling around $51.50.

Crude prices in the U.S. are already down 20% compared with last year. The price for a barrel of benchmark U.S. crude hasn't been above $70 since June and hasn't touched $80 since summer 2024.

President Trump has expressed a desire to see oil prices hit $50 per barrel, but analysts note the math doesn't work for much of the U.S. oil industry at that price point. Many shale producers need prices above $60 to maintain profitability, potentially leading to production cuts that would eventually support prices—but not without pain in the interim.

Venezuela: The Wild Card

One factor adding volatility to oil markets is the Trump administration's announcement of plans to take control of Venezuela's oil industry. The news sent shares of major U.S. refiners sharply higher, with Valero, Marathon Petroleum, and Phillips 66 rising between 5% and 6% at the market open when the news broke.

JPMorgan estimated that if Venezuelan reserves were consolidated under U.S. influence, the combined total could position America as a holder of about 30% of the world's total oil reserves. However, the political and logistical complexities of actually developing Venezuelan resources create significant uncertainty.

Natural Gas: The Middle Ground

While 2026 looks challenging for oil, natural gas stocks may fare better. Demand for the cleaner-burning fuel is growing due to the construction of new liquefied natural gas (LNG) export terminals and—critically—AI data centers that need reliable power.

Tortoise Capital Advisors' senior portfolio manager Brian Kessens has highlighted Williams Companies (WMB) and Energy Transfer (ET) as top stock picks for 2026, citing the natural gas infrastructure buildout required to meet growing demand.

Portfolio Considerations

The bifurcation in energy markets creates strategic decisions for investors:

Clean Energy Exposure: Investors looking to capture the AI-driven power demand trend can consider diversified clean energy ETFs, individual solar and wind developers, or utilities with significant renewable portfolios.

Selective Oil Exposure: Some oil and gas companies may do well in 2026 even if crude prices soften, particularly those with disciplined capital allocation, strong cash flows, and resilient business models. Analysts have highlighted GeoPark Limited (GPRK), Sunoco (SUN), and Cenovus Energy (CVE) as potential outperformers.

Natural Gas Infrastructure: Pipeline and midstream companies offer exposure to the natural gas buildout without direct commodity price risk.

Consolidation on the Horizon

Falling oil prices typically fuel merger and acquisition activity as larger, better-capitalized companies acquire distressed assets at attractive valuations. Investors should watch for consolidation announcements that could reshape the sector.

"While 2026 will likely be a down year for the oil market, it should be a much better year for natural gas stocks. Demand for the cleaner-burning fuel is growing due to the construction of new liquefied natural gas export terminals and AI data centers."

— Industry analysis

The Bottom Line

Energy in 2026 isn't a monolithic sector—it's two distinct investment themes moving in opposite directions. Clean energy benefits from structural tailwinds that extend well beyond this year, while oil faces both cyclical headwinds and longer-term demand questions.

For investors, the choice isn't necessarily either-or. A barbell approach—combining clean energy growth exposure with selective, value-oriented oil investments—may capture opportunity on both ends of the energy spectrum while hedging against the uncertainty inherent in predicting which trend will dominate.