The crude oil pricing environment is expected to experience significant volatility this year, which will negatively impact the exploration and production activities of integrated energy companies. A deceleration in oil production growth can create challenges, thereby constraining earnings from upstream operations. At the same time, the accelerating shift toward renewable energy is introducing greater uncertainty to the Zacks Oil and Gas Integrated International industry’s prospects. This combination of factors suggests a challenging and softened industry environment that is expected to persist through at least the remainder of 2025.Among the companies in the industry that will probably survive the business challenges are Exxon Mobil Corporation XOM, Chevron Corporation CVX and Shell plc SHEL.\n\nThe Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products.\n\nIn downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies’ downstream activities involve chemical businesses that manufacture raw materials for making plastics. The integrated players are now gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.\n\nThe Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #189, which places it in the bottom 23% of the 245 Zacks industries.\n\nThe group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.\n\nBefore we present a few stocks that you may want to consider, let us take a look at the industry’s recent stock market performance and valuation picture.\n\nThe Zacks Oil and Gas Integrated International industry has underperformed the broader Zacks Oil - Energy sector and the Zacks S&P 500 composite over the past year.\n\nThe industry has plunged 5.4% over this period compared with the S&P 500’s growth of 17.3% and the broader sector’s decline of 2.6%.\n\nOne-Year Price Performance\n\nThe industry's current valuation\n\nSince oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.\n\nOn the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 4.27X, lower than the S&P 500’s 17.85X. It is also below the sector’s trailing 12-month EV/EBITDA of 4.77X.\n\nOver the past five years, the industry has traded as high as 6.54X and as low as 2.75X, with a median of 4.11X.\n\nTrailing 12-Month Enterprise Value-to EBITDA (EV/EBITDA) Ratio\n\n3 Integrated International Stocks to Watch\n\nChevron: The company completed its $53-billion acquisition of Hess Corporation, thereby strengthening its upstream portfolio and obtaining a 30% interest in the highly valued Stabroek Block offshore Guyana. Chevron gains strategic access to one of the most prolific deepwater discoveries of the past decade, estimated to hold more than 11 billion barrels of recoverable oil. The acquisition also strengthens its position in the U.S. Bakken shale, the Gulf of Mexico and Southeast Asia. It currently carries a Zacks Rank #3 (Hold).\n\nThe move comes as a turning point for Chevron as it is facing mounting pressure to replenish its reserves and strengthen free cash flow amid ongoing volatility in the oil markets.\n\nYou can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. \n\nPrice and Consensus: CVX\n\nExxonMobil: The company's acquisition of Pioneer Natural Resources expanded its production capabilities in the Permian Basin, one of the most profitable regions in the United States due to its inexpensive production costs. XOM boasts a strong portfolio of upstream assets, focused on oil-rich resources in the Permian Basin and offshore Guyana. Production costs in those assets are low. Therefore, the leading integrated energy major can overcome a collapse in oil and gas prices. Similar to its operations in the Permian, ExxonMobil boasts a robust project pipeline in offshore Guyana resources. It presently carries a Zacks Rank #3.\n\nPrice and Consensus: XOM\n\nShell: The company’s acquisition of Pavilion Energy strengthens its LNG trading capabilities and positions itself for long-term growth in cleaner fuels. Shell’s position as a major supplier of LNG should help the company meet the fuel’s growing demand and improve its cash flow. Shell, with a Zacks Rank of 3, is targeting a 4-5% annual increase in LNG sales over the next five years and 1% annual production growth.\n\nPrice and Consensus: SHEL

3 Integrated Energy Stocks to Gain Despite Industry Vulnerability

The article discusses challenges facing the integrated energy sector due to oil price volatility and the shift toward renewables. It highlights three companies—Exxon Mobil, Chevron, and Shell—as potential survivors, detailing their strategies, recent acquisitions, and industry positioning.