Oil prices have long been a rollercoaster, impacting everything from gas station signs to global markets. For investors in the oil and gas sector, one question stands out: “Oil prices went down, do the returns?” To answer this, we’ll explore the past five years—where oil prices averaged around $70 per barrel—and look ahead to the next decade, where experts predict a range of $70-$95. Drawing on historical data, insights from Investing in Oil and Gas e-book, expert opinions from industry leaders Stu Turley, RT Trevino, and Michael Tanner, and recent web trends, this blog post unpacks how price shifts affect returns and what strategies can keep investors ahead of the curve. Let’s dive into the oil price trends and see what they mean for oil and gas investment returns.
Oil Prices and Returns: The Big Picture
Oil prices aren’t just numbers—they’re a pulse check for the energy sector. When prices climb, oil companies often enjoy wider margins, boosting profits and returns on oil investments. But when they drop, the squeeze is on, potentially shrinking returns unless companies adapt. Over the past five years, we’ve seen prices stabilize around $71 for WTI crude and $75 for Brent crude. Does this mean returns have stagnated? Not quite. The story lies in how the industry—and investors—navigate these shifts.
This blog will break it down: historical trends from 2020-2024, expert forecasts for the next decade, and actionable investment strategies. Whether you’re a seasoned investor or just curious about investing in oil and gas, you’ll find insights here to guide your decisions.
The Past Five Years: A Stable $70 Baseline
Looking back, the past five years have been a wild ride with a surprisingly steady landing. From 2020 to 2024, oil prices weathered a pandemic plunge, a 2022 peak, and a gradual leveling off:
- 2020: Prices tanked due to COVID-19, with WTI even dipping negative briefly.
- 2021: Recovery kicked in, averaging $66.34 for WTI.
- 2022: A high of $94.33, driven by post-pandemic demand and geopolitical tensions.
- 2023: Settled at $77.07.
- 2024: Hovering around $79.48 (based on year-to-date trends).
The five-year average? $71.31 for WTI and $75.47 for Brent—right around that $70 mark. This stability offered predictability for oil companies, supporting long-term projects like new wells and infrastructure. But it also capped the windfall profits of higher price eras.
Here’s the twist: returns didn’t crash with lower prices. In 2024 alone, the sector paid out $213 billion in dividends and $136 billion in buybacks, signaling strong financial health. Companies that embraced efficiency—using tech like horizontal drilling or streamlining operations—kept oil and gas investment returns robust. This shows that while oil price trends matter, returns depend heavily on strategy and adaptability.
The Next Decade: What Experts Predict
What’s in store for the future of oil prices? We tapped three experts from Investing in Oil and Gas e-book for their takes:
Stu Turley: Oil’s Staying Power
Energy commentator Stu Turley is firm: “Globally, oil and gas are not going anywhere.” He points to growing demand in markets like China and OPEC’s knack for stabilizing prices at $75-$80 via production cuts. Turley sees oil holding steady around $70-$85 over the next decade, driven by industries like plastics and aviation. For investors, this suggests a reliable base for energy sector investments, with returns tied to consistent demand.
RT Trevino: The Bull Case
RT Trevino, from Pecos Country Operating, is all in: “I’m extremely bullish on oil and gas.” He highlights surging consumption, plus new demand from AI data centers guzzling natural gas. Trevino cites a $4 trillion investment gap to maintain production, predicting a “huge bull market” with prices hitting $85-$95. If he’s right, returns on oil investmentscould soar, making the next decade a prime window for investment opportunities in oil and gas.
Michael Tanner: A Cautious Optimism
Fund manager Michael Tanner takes a middle road: “The oil and gas market is more resilient than many thought, but it’s complicated.” He agrees demand is strong—again, those AI data centers—but flags risks from renewables and economic shifts in China. Tanner expects prices to settle at $70-$85, a range that balances global needs. Investors, he says, must stay nimble to lock in oil and gas industry analysis-driven returns.
The Consensus
Prices might average around $80 over the next decade, with potential upside to $95 if demand and underinvestment align. This stability-with-growth scenario suggests returns won’t necessarily tank if prices dip—they could even climb with the right moves.
Investment Strategies: Making the Most of It
So, how do you turn oil price forecasts into profits? Investing in Oil and Gas e-book outlines key approaches:
Asset Classes to Consider
Here’s a snapshot of options, each with its own risk-reward mix:
| Asset Class | Description | Pros | Cons |
| Minerals & Royalties | Passive income from land rights | Stable, low risk | Limited growth if prices stall |
| Producing Assets | Active wells with steady output | Predictable cash flow | Less upside potential |
| Drilling Opportunities | From proven sites to wildcat exploration | High reward potential | Higher risk, needs scrutiny |
Pick based on your goals—royalties for safety, drilling for growth.
Investment Types
- Syndication: Pool funds for diversification and lower entry barriers.
- Direct Placement: Go solo for control and bigger potential payouts, but with more risk.
Due Diligence
Evaluate deals carefully. Ask: Where’s the asset? What’s the operator’s history? Are wells modern (horizontal) or old-school (vertical)? Resources like Sandstone Group’s video series (in the e-book) guide this process, ensuring you snag the best investment opportunities in oil and gas.
Tax Perks
Here’s a bonus: 80-100% of your investment can be tax-deductible depending on how much you invest. Pair this with a CPA to boost net oil and gas investment returns.
Tech’s Role: Boosting Returns
Technology is a game-changer. Past innovations like fracking cut costs, keeping returns solid at $70 oil. Looking forward, AI and predictive maintenance could save 20-30% on downtime (per McKinsey), while data analytics optimize production. Invest in tech-savvy firms to maximize returns on oil investments, whatever the price.
Market Dynamics and Risks
Geopolitics—OPEC cuts, regional conflicts—and that $4 trillion investment gap could tighten supply, lifting prices. Natural gas demand from AI adds upside. Risks like renewables or economic slowdowns loom, but diversification across assets and smart risk management can keep your portfolio humming.
When Prices Drop: Do Returns Follow?
Not always. Lower prices can spike demand, ramping up volumes and offsetting losses. Efficient firms, especially downstream players, can even thrive. The past five years prove returns aren’t price-slaves—strategy rules.
The Next Decade: Opportunity Awaits
Expect prices in the $70-$85 range, with spikes possible to $95. Returns will hinge on your approach—picking assets, leveraging tech, and balancing risks. The industry’s resilience and demand growth signal a bright oil market outlook.
Conclusion: Strategy Over Price
“Oil prices went down, do the returns?” Not if you play it smart. The past five years at $70 show strategy Trump’s price alone. The next decade offers stability and upside for those who use tools like The Investor’s Guide to Joy to navigate it.
Ready to dive into investing in oil and gas? Grab the e-book at https://investorsguidetojoy.com/oil-gas/ and share this post with fellow investors.
