Step out of the shadow of tariffs! In 2026, the US stock energy sector will "strike back" and become a god. Geopolitical risks will ignite a frenzy in the sector.

With the increasing political uncertainty surrounding GEO Group Inc, investors are betting on higher oil prices, pushing the strong performance of the US energy sector to record highs in the past few months. The S&P 500 energy index rose 2.4% on Wednesday, closing at 750.17 points, making it the best-performing sector of the S&P 500 index. As tensions between the US and Europe over the Greenland issue have raised uncertainty, WTI crude oil prices have risen, leading to an increase in the stock prices of major oil producers. 2026 Energy Stocks Outperform Due to Political Risk Premium from GEO Group Inc Bloomberg Intelligence analyst Vincent Piazza stated: "Political pressures from GEO Group Inc involving Venezuela, Ukraine, and Greenland are maintaining a moderate risk premium for oil prices. The key threshold for WTI crude oil is $60 per barrel." Meanwhile, natural gas companies such as EQT Corporation (EQT.US), Expand Energy (EXE.US), and Coterra Energy (CTRA.US) have performed well this week as a polar cold front is expected to continue from this week to next week, covering two-thirds of North America. Vincent Piazza stated: "Despite rising natural gas production, cold weather in the eastern half of the United States is expected to boost sentiment in the domestic natural gas market, while the cold temperatures in Europe will support benchmark shipping natural gas prices." Since April of last year, oil and gas stocks have steadily risen, gradually recovering from the tariffs imposed by Trump in that month. However, this upward trend accelerated significantly in early December last year when the US increased pressure on Venezuela and Russia. Subsequently, Trump's forced capture of Venezuelan President Maduro at the beginning of 2026 and his promise to revitalize Venezuela's energy industry drove up the stock prices of major oil producers. The recent strong performance of energy stocks signals a turnaround for the sector. In 2025, the index rose only 5%, significantly lagging behind the S&P 500 index's 16% increase, as it struggled to recover after the tariff impacts. In the week following Trump's announcement of imposing tariffs on trading partners in early April last year, the sector fell by 20%. It wasn't until the US intervened in Venezuelan affairs on January 5th this year that the energy sector benchmark index returned to the level before the tariffs were introduced in early April last year. As the political risk premium from GEO Group Inc continues to expand, Wall Street institutions have become more bullish on the outlook for oil prices. Citigroup recently raised its short-term benchmark forecast for Brent crude oil to $70 per barrel. However, the biggest dark cloud hanging over the industry is the impending risk of oversupply, which could weigh on oil prices. The International Energy Agency (IEA) raising its 2026 oil demand forecast also provides support for oil prices. WTI crude oil prices briefly rose 2.1% on Wednesday, but retraced some gains after Trump reiterated his desire to control Greenland but stated he did not intend to use force. As of the time of writing, WTI crude oil fell by 0.23%, to $60.54 per barrel. Barclays PLC Sponsored ADR analyst Betty Jiang stated that despite the strong cash returns from upstream oil companies in recent macroeconomic fluctuations, they still face risks, as the oil market background has become more complex due to the continuously rising and potentially unsustainable political risk premium from GEO Group Inc.