“Partner with what the government incentivizes, and you’ll often find the most powerful opportunities.”
Oil and gas is one of those asset classes people either love or completely ignore.
And right now, it’s definitely being ignored.
That’s exactly why it has my attention.
At the time of recording, oil prices were under $60 a barrel.
That alone changes the conversation.
When assets are out of favor, that’s often when the best long-term opportunities show up.
Today, I want to walk you through why oil and gas is one of my favorite alternative investments heading into 2026.
Not as a replacement for real estate.
But as a complement to it.
Let’s break it down.
1. Oil and Gas Is an Out-of-Favor Asset
Historically, oil prices have been well over $100 per barrel.
https://internationalbanker.com/wp-content/uploads/2019/06/Is-Oil-on-Its-Way-Back-up-to-100-Per-Barrel.png
Seeing prices under $60 feels uncomfortable for most investors.
That discomfort is exactly what creates opportunity.
A big driver of this cycle is OPEC.
OPEC functions as a global supply manager.
At times, they intentionally flood the market.
Prices drop.
Margins shrink.
And higher-cost producers—especially U.S. shale operators—get squeezed out.
Once enough competition disappears, supply tightens again.
Prices rise back into the $70–$90 range or higher.
This cycle has repeated for decades.
For investors, entering when prices are low can mean:
- Less competition for drilling rights
- Lower land and development costs
- Better long-term positioning as prices normalize
Many oil and gas deals aren’t short-term trades.
They can last 5, 10, even 15 years.
That makes timing incredibly important.
Buying when sentiment is negative often leads to stronger outcomes later.
This is the same principle that applies in real estate downturns.When others hesitate, disciplined investors lean in.
2. The Tax Benefits Are Extremely Powerful
This is the part most people don’t fully understand.
Oil and gas offers some of the most aggressive tax incentives available to private investors.
Through intangible drilling costs (IDCs), investors can often deduct 80–90% of their initial investment in year one.
Let that sink in.
If you invest $100,000, it’s not uncommon to see $80,000–$90,000 in first-year deductions.
Those deductions can often be applied against:
- W-2 income
- 1099 income
- Business income
- Investment income
I’m not a CPA, so always confirm with your own tax professional.
But for high earners, this can be a game-changer.
Here’s a simple example.
If you’re in a 30% tax bracket and receive a $90,000 deduction:
That’s roughly $27,000 in taxes saved in year one.
And that’s before you receive a single dollar of cash flow from the investment itself.
This is why I always talk about partnering with government incentives.
The government wants:
- Domestic energy production
- Stable energy pricing
- Long-term infrastructure investment
Oil and gas checks all of those boxes.
Just like multifamily housing does.
When you align with incentives, the math tends to work in your favor.
3. Strong Cash Flow With Defined Life Cycles
The third reason I love oil and gas is cash flow.
Many oil and gas deals have relatively short payback periods.
Often somewhere between 18 months and three years.
After capital is returned, investors continue receiving distributions.
Production typically peaks early.
Then slowly declines over time.
Some wells may last seven to ten years.
Others can produce for 20 years or more.
Eventually, production drops enough that the well is capped.
The deal has a clear beginning, middle, and end.
That clarity matters.
For high-income professionals earning hundreds of thousands—or even millions—per year, this structure can be incredibly attractive.
You get:
- Early cash flow
- Significant tax sheltering
- Long-term income potential
It’s not about chasing speculation.
It’s about stacking predictable advantages.
Cash flow plus tax efficiency is a powerful combination.
Bringing It All Together
Oil and gas isn’t for everyone.
And it shouldn’t replace a solid core portfolio.
But as a diversification tool, it can be incredibly effective.
Especially when:
- Prices are depressed
- Competition is low
- Tax incentives are strong
That’s why oil and gas is firmly on my radar for 2026.
If you’re already investing in real estate, this can complement your strategy well.
If you’re a high earner looking for tax efficiency, it’s worth exploring.
I’d love to hear your thoughts.
Are you investing in oil and gas right now?
Drop a comment and let me know.
Before you go, make sure to grab our special report on inflation investing, where we break down smart strategies for protecting and growing wealth in uncertain environments.
If you’re interested in investing alongside us, join our investment club and schedule a call with our team.
And don’t forget to check out my bestselling book on Amazon, Fire Yourself, where I break down how to build passive income and reclaim your time.
Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.
References
Forbes. (2025). Why your investment portfolio should include oil and gas.
https://www.forbes.com/sites/forbesbooksauthors/2025/11/10/why-your-investment-portfolio-should-include-oil-and-gas/
International Banker. (2019). Is oil on its way back up to $100 per barrel?
https://internationalbanker.com/wp-content/uploads/2019/06/Is-Oil-on-Its-Way-Back-up-to-100-Per-Barrel.png
Oxford University Press. (n.d.). OPEC and global energy markets.
https://academic.oup.com/jwelb/article/17/1/19/7497082
Bronson Equity. (n.d.). Fix your investor mindset.
https://bronsonequity.com/fix-your-investor-mindset/
DW Energy Group. (n.d.). Maximizing returns: How oil and gas investors benefited this tax season.
https://www.dwenergygroup.com/maximizing-returns-how-oil-and-gas-investors-benefited-this-tax-season/
DW Energy Group. (n.d.). Why oil & gas?
https://www.dwenergygroup.com/why-oil-gas/
Oil and gas explained [Video]. (n.d.). YouTube.
https://www.youtube.com/watch?v=oL6x7hhjyiI&t=7s
Multifamily investing [Video]. (n.d.). YouTube.
https://www.youtube.com/watch?v=1tlvAv_3KH4&t=9s
Cash flow investing [Video]. (n.d.). YouTube.
https://www.youtube.com/watch?v=y7Es1yFKb2A&t=2s
Tax efficiency strategies [Video]. (n.d.). YouTube.
https://www.youtube.com/watch?v=t81GCqY9Qek&t=189s
Bronson Equity. (n.d.). How to use inflation to your advantage.
http://www.bronsonequity.com/inflation
Bronson Equity. (n.d.). Join our investment club.
http://www.bronsonequity.com/joinHill, B. (2023). Fire yourself: Replace your working income with passive income in 3 years or less. Amazon.
https://www.amazon.com/dp/B0CJZY81VJ/
