Energy stocks like Chevron and TotalEnergies benefit from strong cash flow despite weakening demand growth forecasts.
Global oil demand growth is decelerating as electric vehicle adoption rises, fuel efficiency improves, and China’s economic slowdown weighs on consumption. The International Energy Agency projects demand destruction due to elevated prices tied to geopolitical tensions, including the Iran conflict.
Despite these headwinds, oil prices remain above $90 per barrel, supported by supply underinvestment, refinery constraints, and persistent geopolitical risks. This paradox has created a favorable environment for integrated oil majors, which continue to generate robust free cash flow.
Chevron and TotalEnergies stand out due to their strong balance sheets and production growth. Chevron’s recent acquisition of Hess expands its exposure to Guyana, a low-cost, high-growth oil region. Both companies trade at modest valuations despite delivering strong shareholder returns.