On Wednesday, oil prices experienced significant volatility. Brent crude futures dropped to a four-year low of $58.46 per barrel before rebounding to settle at $64.82. Similarly, West Texas Intermediate (WTI) crude fell to $55.10 per barrel before recovering to $62.
The early drop was largely due to lingering concerns over a global supply glut—especially with record output coming from U.S. shale and OPEC+ signaling no immediate cuts—rising trade tensions, and a stronger U.S. dollar.
As we have seen over the past few weeks, the energy sector has been one of the first sectors to take a hit from Trump's tariff announcements. Investors worry about slow global trade and economic momentum, which logically pressures oil demand expectations.
However, these fears might not run as deep as some of today’s prices suggest, which is why you should consider some of the current price dips as opportunities.
It is true that some short-term halts in trade might occur, but over the long term, the world's leading economies will simply not be able to rebound from these effects without enough oil on hand to support them.
With that in mind, Exxon Mobil (NYSE:XOM) and Transocean Ltd (NYSE:RIG). are two oil and energy picks that could serve as valuable additions for investors seeking to hedge or even benefit from volatility tied to tariffs and global uncertainty.
As a global oil producer and exporter, Exxon Mobil offers a level of stability that is increasingly scarce in today’s market.
While the broader S&P 500 has declined more than 12% over the past month, Exxon Mobil had shown relative resilience until just Monday, when the stock closed down 2.4% and fell below its 50-day moving average for the first time in months.
That decline came even as oil prices dropped more than 15% at the beginning of April, highlighting the pressure the sector is under. However, analysts remain confident in Exxon Mobil’s long-term position. The company’s scale, diversified operations and global reach provide a degree of insulation from short-term shocks.
Far from just an idea, this belief is proven as Exxon’s short interest pulled back by 1.8% over the past month. While it may not seem like a big retreat, just the opposite might have been expected from a stock that has given up the month’s gains during this market-wide selloff.
Yet bearish traders know that this stock can go up just as easily as it went down due to its key positioning in global markets.
Because of this, analysts have kept a $128.20 price target on the stock as of April 8, 2025, calling for as much as 23.6% upside. Analysts aren’t always willing to back a stock with recently bearish price action, like Exxon, so the fact that the theme remains focused on the upside should matter a lot more today.
In addition, shareholders can enjoy a 3.8% annualized dividend yield to cushion some of the short-term volatility.
The Speculative Play: Transocean
Because Transocean operates at the upper end of the value chain in energy markets, it is significantly more exposed to the swings in oil prices. And while that may be a negative today, when prices recover on the inevitable rebound of energy demand despite what tariff assumptions may be, the offshore drilling specialist will be one of the first stocks to reflect an uptrend.
As oil continues to decline, Transocean’s stock has followed suit, losing more than 5% Monday alone and now trading at just 30% of its 52-week high.
Like Exxon, analysts decided that the future is too bright to ignore Transocean’s potential. They have yet to revise their outlook significantly, and the consensus price target remains near $5 per share—pointing to over 130% potential upside from today’s levels.
Transocean’s financial performance depends heavily on a rebound in oil demand and pricing, making it a highly volatile but potentially rewarding play if sentiment shifts. If you are comfortable taking on this level of volatility risk, Transocean could present a massively asymmetrical opportunity.
The Balanced Route: Energy ETFs
For those hesitant to commit to individual names, energy sector exchange-traded funds (ETFs) offer a more diversified approach.
The Energy Select Sector SPDR Fund NYSEARCA: XLE (NYSE:XLE) provides broad exposure to oil and gas majors, including Exxon Mobil, Chevron (NYSE:CVX), and Schlumberger (NYSE:SLB).
Unlike many parts of the market, XLE has held up relatively well, outperforming the S&P 500 by more than 5% during the recent tariff-driven selloff.
This performance underscores investor preference for the energy space amid broader uncertainty.
ETFs like XLE reduce single-stock risk while allowing investors to maintain directional exposure to a sector with strong long-term fundamentals.
Energy: A Sector With Staying Power
Though the market reaction to tariff headlines has been swift and punishing, the energy sector's core fundamentals remain intact.
Even if oil demand temporarily softens, history suggests it will rebound once trade uncertainty fades. In that context, these recent pullbacks could prove to be temporary distortions rather than lasting declines.
Whether through the relative safety of Exxon Mobil, the high-reward potential of Transocean Ltd., or the diversified cushion of a fund like XLE, investors have options. Energy is still a cornerstone of the global economy—and that makes it a sector worth watching, even in volatile markets.