Forget High-Flying Oil Drillers: 1 Fee-Based Midstream Giant to Buy Right Now

EOG Resources (NYSE:EOG) is the sanction each lipid bull is screaming astir arsenic WTI crude spiked to $114.58 successful aboriginal April 2026 and traders heap into upstream drillers to play the Iran warfare proviso shock.

The EOG Trade Is a Sugar High

Geopolitical premium fades. It ever does. And erstwhile it does, EOG holders get to relive the Q4 2025 income statement: GAAP nett income collapsed to $701 cardinal from $1.25 cardinal twelvemonth implicit year, a 43.96% drop, with operating income down 40.77% YoY aft the institution absorbed $506 cardinal successful after-tax impairment charges connected Barnett Shale and Woodford Oil Window assets. Realized crude prices fell from $71.66 to $59.54 per tube successful a azygous twelvemonth and escaped currency travel dropped 30.04%. To apical it off, full indebtedness ballooned from $4.75 cardinal to $7.94 cardinal to money the Encino deal, and Piper Sandler trimmed its terms people citing a little constructive lipid macro.

Now look astatine the chart. EOG is up 31.95% twelvemonth to day and trading astatine $136.20, adjacent the precocious extremity of its 52-week scope topping astatine $150.70. The guardant aggregate of 8x looks inexpensive lone if you presume $110 crude is permanent. It is not.

The Better Trade: Kinder Morgan

Redirect your attraction to Kinder Morgan (NYSE:KMI), the $73.7 cardinal fee-based pipeline elephantine that earns the aforesaid toll whether WTI prints $85 oregon $115. Long-term, fixed-fee take-or-pay infrastructure contracts insulate important currency flows, and 3 things marque this the retirement-portfolio commercialized of the year.

1. A $10 cardinal contracted backlog. Approximately 90% is tied to earthy state infrastructure and astir 60% supports powerfulness generation, with the $1.8 cardinal Trident Intrastate Pipeline successful work Q1 2027 and the $3.5 cardinal South System Expansion 4 already locked down. Backlog grew by $912 cardinal successful Q4 alone.

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2. The LNG and information halfway tailwind is structural. The EIA projects U.S. LNG export capableness volition summation to 27.7 Bcf/d by 2030 from 14.9 Bcf/d successful 2025. Kinder Morgan already has semipermanent contracts to determination 8 Bcf/d to LNG facilities, increasing to 12 Bcf/d by extremity of 2028. And astir 70% of aboriginal information halfway powerfulness request is successful states served by KMI assets. Q4 transport volumes roseate 9% YoY and gathering volumes jumped 19%.