I. BIG OIL AND RENEWABLE ENERGY
Big Oil is owned and controlled by big institutional investor funds. In fact, for each of the five oil majors often referred to as “Big Oil” (ExxonMobil, Chevron, TotalEnergies, Shell, BP), the controlling stock ownership is in no more than 25 of these institutional investors—not always the same funds, but with huge overlap.[1] Most of these funds (and families of funds) declare themselves to be “passive investors,” which means they supposedly don’t actively interfere in the management of the company, and supposedly robotically copy the components of an index they claim to be tracking, such as the S&P 500 (which contains the two US oil majors, ExxonMobil and Chevron, but not the others).
S&P stands for Standard & Poor’s, “an American financial intelligence company that [provides] … investable indices, [such as the S&P 500] and credit ratings for companies…”[2] The “500” part of the index refers to the largest 500 US companies, not simply listed in the index, but listed by the total number of outstanding shares multiplied by their current selling price. The jargon for this is their “market capitalization.”[3] The institutional investment funds that “track” this index are set up by banks, such as JP Morgan Chase, or investment companies such as Fidelity, Blackrock, etc. Individuals or pension funds then buy these passive funds with the belief that they are then buying a slice of the entire stock market.
The overwhelmingly held popular view, expressed even by major columnists on financial markets, is that the institutional fund managers are almost like stenographers taking down the dictation of the Standard & Poor’s index compilers—the popular view is that they must, based on the funds own prospectus, which is a contractual obligation to their own investors, i.e., the individuals or organizations that buy their fund, replicate their fund with the exact components and in the exact percentages as in the index. This supposedly allows the ordinary investors to buy the whole market “as is,” not as interpreted by a fund manager. So, no matter what the management of one of these 500 companies does that the fund manager thinks is bad for the holders of the fund, the fund manager supposedly can’t sell the stock.
This myth simply does not square with reality; the fund managers can and do sometimes sell the shares of the individual companies in the index. The details are described in a meticulously researched, 2024, detailed analysis in the Yale Journal on Regulation, which bills itself as “The Nation’s Top-Ranked Administrative Law and Corporate Law Journal.” According to the article, “Discretionary Investing by ‘Passive’ S&P 500 Funds,” by Peter Molk and Adriana Robertson, “Common language [in the fund’s prospectus] like holding 80 % of assets in S&P 500 companies gives [passive] index funds considerable flexibility in their investment decisions.” [4] This means the tracking fund doesn’t promise, i.e., isn’t legally committed, to replicate 100 % of the S&P 500, only 80 %; they could sell the Big Oil companies (or others) and not be in violation of their contractual commitments. In other words, holders of the fund could not successfully sue the fund for misleading them by selling ExxonMobil or Chevron.
On some funds, the managers have even more wiggle room. The same article notes that many funds, including major ones, use sampling to replicate the reference index : “Fidelity’s S&P 500 fund, for instance, states that “the fund may not always hold all of the same securities as the S&P 500® Index’ and that it ‘may use statistical sampling techniques to attempt to replicate the returns of the index”. This means that the fund managers’ legal, contractual, commitment is not to provide a carbon copy of the index, but to use only some of the stocks in the index to attempt to provide at least as much money, in the form of stock appreciation and dividends, as a total carbon copy of the index might provide.
These two types of wiggle room (80 % and sampling) are precisely how the various funds from the rival institutions compete with each other by offering rival S&P 500 funds.
How much do the holdings vary from the index? According to the article, “…even among the largest S&P 500 funds, holdings differed from the index by a total of between 1.7 % and 7.5 % in the fourth quarter of 2022.”
ExxonMobil, weighted by market capitalization on the S&P 500 index constitutes 0.87 % of the index. Chevron constitutes 0.53 %.[5] Together they make up 1.4 % of the index. With these percentages, a fund manager could certainly reduce its holdings in ExxonMobil and Chevron, even sell all of their holdings in them, and still meet the proclaimed requirement of the fund.
So, passive or not, the fund manager’s control still remains the implicit ability to sell the stock. They don’t sell if the company serves their purpose—to provide an adequate dividend return and maintain the stock price. The funds will keep holding the stock if they simply get their share of the “free cash flow,” defined by a common source, Investopedia, as “The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.”[6] The extra money then goes into dividends, special dividends, and stock buybacks. From Big Oil, when the companies overwhelmingly stay in oil, the funds get their money. Here’s an analysis of ExxonMobil from a common source, Investing.com :
“… the 3.3 %+ dividend plus buybacks north of $20B per year create an embedded return floor… [ExxonMobil] at current levels and with current data, deserves a clear, data-backed rating : it is a BUY rather than a Hold or a Sell.”[7]
This analysis illustrates why Big Oil won’t go into renewable energy in a big way; the controlling funds simply want all of their proportion of the available, extra cash. So, of course, do the hundreds of thousands of small investors, and the smaller institutional investor funds. But if some of the hundreds of thousands of small investors sell because they are afraid their stock will go down if an oil company goes into wind and solar, it is unlikely to make even a perceptible ripple on the stock price. If there were, say, 250 controlling institutional shareholders and a few sold, it would likely also produce at worst a blip in the stock price.
But if the implicit control is really held by no more than 25 funds, and a few of them sold all or a material percentage of their relatively high percentage of ownership, they could tank a specific stock—especially if they did it on a bad day for the stock market in general. In this case, other fund managers seeing the stock fall, might simply follow in the momentum by dumping their shares, as might some of the hundreds of thousands of small investors who might be paying attention. This is easy to see just by looking at the percentage of ownership by the top 4 of these funds in the case of ExxonMobil :[8]
| Vanguard Fiduciary Trust Co. | 10.19 % |
| BlackRock Advisors LLC | 5.929 % |
| STATE STREET CORPORATION | 4.901 % |
| Fidelity Management & Research Co. LLC | 3.017 % |
And in tanking the stock, the major fund managers who started the stock avalanche might very well be smiling. Perhaps they had warned the CEO over drinks at a midtown Manhattan restaurant not to transform the company out of oil and into renewable energy; it might reduce the stock’s dividends and the stock buybacks, thus reducing the value of the Big Oil company to the fund.
Wind and solar infrastructure require major upfront investments – essentially the company pays to a huge degree in advance for all the electricity it will get for the next 20 years, since, with wind and solar, there are no fuel costs and the operating costs are relatively minimal. But it takes a while to recover the investment, depending, among other things, on the price of electricity.
A 2023 report by energy consultant Rystad Energy explained : “a long-term electricity price of €50/MWh ($49/MWh), [yields] the expected … payback period of 11 years…”[9] The specific figure was for solar in Germany; obviously other places could have shorter, or longer, paybacks—depending on the degree of sunlight, logistics, local regulations, local political opposition, etc.
Also, the longer the pay-back period, the bigger the impact of interest rates and politics, e.g., in the US, Trump cancelling Biden’s renewable energy tax credits.
So, when CEOs of Big Oil companies have tried to go into renewables in a big way, they have found themselves no longer CEOs. This happened twice at BP and once at Shell. In both companies the new management then reduced its investments in renewable energy. At BP, after firing Lord John Browne (supposedly concerning a personal life related issue), the new top management reduced its focus on renewable energy.[10] Again at BP, after firing Bernard Looney (again, supposedly on a personal life issue), they again reduced their focus on renewables.[11] At Shell, after getting rid of Ben Van Beurden, the company did the same thing.[12] So the Big Oil CEOs who do not go significantly into renewable energy may not always be oil-ideologues; they may simply be persons devoted to hanging onto their jobs.
II. BIG OIL AND VENEZUELA
On 3 January 2026 Donald Trump captured, in a surprise military operation, Nicolas Maduro, the then President of Venezuela. Trump announced that he would now “run” Venezuela’s oil. In effect, he abducted the President and grabbed as war booty control of what OPEC claims to be the world’s largest oil reserves,[13] 300 Billion barrels. Trump later announced, at a January 9 White House meeting that “we are taking back what was taken from us… we built that entire oil industry.” He said he had arrested Maduro to bring him to trial in the US for “crimes against the United States.”[14] But an overwhelming majority of the US public does not believe him. A CNN poll of 1200 US adults published on January 15 allowed respondents to rate the relative importance of different motivations. While 67 % of the sample thought the major factor for the US grabbing Maduro was to give the US access to Venezuelan oil, only 39 % thought the grab was to bring Maduro to stand trial in the US.[15]
At the January 9 White House event, Trump called the US’s top oil executives together to encourage them to divvy up the spoils among themselves. The BBC reported that he told the assembled oil executives, « You’re dealing with us directly. You’re not dealing with Venezuela at all. We don’t want you to deal with Venezuela. »[16]
There were two complications in Trump’s “dealings”. First, anyone who assumed that Venezuela would now be politically stable, and thus a suitable environment for massive, long-term, infrastructure investment was seriously in need of a course in Venezuelan politics and history. The BBC quoted Rystad Energy’s Chief Economist, Claudio Galimberti, « It’s going to be difficult to see big commitments before we have a fully stabilised political situation and that is anybody’s guess when that happens. »[17]
Second, the figure of how much money Big Oil would have to invest was simply too big— “at least $100 Billion of their money, not the government’s money,” Trump said at the January 9 event. After plunking down the money, the break-even payback would be five, ten, even fifteen years later. All this, if it worked, would bring oil production back, by a factor of as much as four, to where it had been before former dictators Chavez and his successor Maduro had ruined it.
And afterwards, what would the Big Oil companies get? More oil :
–They would get more oil in a world already awash in cheap oil, selling at the time of Maduro’s kidnapping and Trump’s plundering at the high $50s for US benchmark oil (WTI), and the low $60s for the EU benchmark, Brent. How much would Venezuelan oil have to sell for per-barrel to cover their costs to produce, the break-even price? Here’s what Bloomberg New Energy Finance said on January 6, 2026 : “Venezuela’s oil production had an estimated break-even price between $42 and $56 a barrel in 2020, according to Rystad Energy, with the Orinoco region at $49.26 a barrel.”[18] After all that massive risk and long delay, they could just cover their costs? That’s war booty?
–They would get more oil in a world where wind and solar infrastructure are already (in parts of the world) producing cheaper electricity than that produced by any fossil fuel, according to the latest analysis by the world class French investment bank, Lazard.[19] Meanwhile, the world is going electric for nearly everything, as indicated in Electricity 2025, a report by the International Energy Agency.[20] The Financial Times even started a series of major articles titled, “The electrification of everything” beginning on 12 December 2025.[21]
–They would get more oil in a world where half the new cars sold in China are already electric and China is exporting the cheap versions of these cars to every place that will let them in. And, on 22 January 2026, the renewable energy think tank, Ember Energy reported that for the first time, in 2025, the 27 EU countries generated more electricity from wind and solar than from fossil fuels—just barely, but more, 30 % versus 29 %.[22]
–They would get more oil in a world where the median cost, not selling price, cost, in January 2026, to produce a barrel of fracked oil in one of the major US shale formations, the Bakken in North Dakota, is $58, but the marginal cost to produce a barrel of oil in “on-shore Middle East” is $27, according to Rystad Energy.[23] This is why Saudi Arabia, operating through the fig leaf of increased OPEC quotas, can run major US frackers out of the fracking business, which they are doing; on 15 January, Harold Hamm, the most important person in US fracking and the one who developed the industry, told a Bloomberg journalist : “This will be the first time in over 30 years that Harold Hamm has not had an operation with drilling rigs in North Dakota, … There’s no need to drill it when margins are basically gone.” [24]
So, has Big Oil done Trump’s bidding?
At the January 9 White House meeting, Darren Woods, CEO of the biggest Big Oil company, ExxonMobil, was seated at a place of honor. Woods’ statement began by focusing specifically on the shareholders, 25 of which could cause him to lose his job. He said, “Obviously, it has to be a win for the company and our shareholders, generating a return for the investments that we make.”[25]
Corporate boiler plate? Maybe not. Apparently Woods knows what happened to the CEOs at two of the other four Big Oil companies, BP and Shell, when the 25 institutional investors didn’t like the company’s investments. He said, “…Venezuela, today it’s un-investable.”
Woods also gave Trump a lesson on Venezuelan history : “We’ve had our assets seized there twice. And so, you can imagine to re-enter a third time would require some pretty significant changes from what we’ve historically seen here and what is currently the state.”
TotalEnergies was not at the January 9 meeting. But a few days later, CEO Patrick Pouyanne, said at another conference : “I know that people want to rush there but I can understand that it will require a clear framework to be able to invest there and it will take time…Maybe you could easily add 100,000 to 200,000 barrels a day, but if you think about 1 million barrels of oil a day, it will require $100 billion.”[26]
Chevron is the only US oil company now operating in Venezuela. Its Vice Chair, Mark Nelson said the company could take “…the momentum of improvements we’ve already made there locally,…building on those.”[27] They now produce there 240,000 barrels a day. He said they could increase this by 50 % within 18 to 24 months–120,000 barrels a day, the figure given by Patrick Pouyanne—a long way from 1 million barrels, let alone 4 million.
At the meeting, the Shell CEO, Wael Sawan pointed out that his company (like Chevron) is still operating in Venezuela, “… we have kept boots on the ground in Venezuela all this time … .“ Sawan, who must know what happened to Ben van Beurden, since he replaced him, sounded a bit like the Chevron executive. …”So we are ready to go and looking forward to the investments, in support of the Venezuelan people.”[28] How much? “…a few billion dollars,” said Sawan. “A few” usually means 3. If each of the five Big Oil companies ponied up $3 Billion, that would make $15 Billion. What’s the source of the other $85 Billion Trump called for? Little Oil?
BP was not present at the meeting.[29]
The implicit control of each Big Oil company by 25 institutional investment funds (not always the same ones) so far seems to keep Big Oil from participating big time in Trump’s oil grab; it would risk the dividends, the stock buy-backs, then the share price, then the CEO’s jobs. If this control appears to be a force for good in this case, remember that the same implicit control also keeps Big Oil from helping to save all of us from the deepening catastrophe of global warming.
[1] https://institut-rousseau.fr/une-poignee-dinvestisseurs-controle-les-plus-grandes-entreprises-petrolieres-que-faire/
See also: https://www.lemonde.fr/idees/article/2024/08/28/chacune-des-cinq-majors-du-petrole-est-controlee-par-pas-plus-de-25-actionnaires-institutionnels_6297602_3232.html?search-type=classic&ise_click_rank=1
[2] https://corporatefinanceinstitute.com/resources/fixed-income/sp-standard-poors/#:~:text=Standard %20 %26 %20Poor’s %20is %20an %20American,ratings %20for %20companies %20and %20countries.
[3] https://www.investopedia.com/terms/m/marketcapitalization.asp
[4] https://www.yalejreg.com/wp-content/uploads/Peter-Molk-_-Adriana-Z.-Robertson-Discretionary-Investing-by- %E2 %80 %98Passive-S_P-500-Funds-41-Yale-J.-on-Regul.-248-2024.pdf
[5] https://www.slickcharts.com/sp500
[6] https://www.investopedia.com/terms/f/freecashflow.asp#:~:text=Free %20cash %20flow %20is %20the,to %20settle %20liabilities %20or %20obligations.
[7] https://www.investing.com/analysis/exxon-gains-traction-as-the-market-rewards-scale-discipline-and-yield-200672713
[8] https://www.marketscreener.com/quote/stock/EXXON-MOBIL-CORPORATION-4822/company-shareholders/
[9] https://www.rystadenergy.com/news/renewable-projects-payback-time-drops-to-under-a-year-in-some-places-capital-inve
[10] https://www.theguardian.com/environment/2015/apr/16/bp-dropped-green-energy-projects-worth-billions-to-focus-on-fossil-fuels
[11] https://europeanbusinessmagazine.com/business/bp-slashes-5bn-in-green-energy-assets-as-oil-major-retreats-from-renewables-push/#:~:text=Oil %20and %20gas %20production %20targets,to %20just %20 %241.5 %2D2 %20billion.
[12] https://www.reuters.com/business/energy/shell-pivots-back-oil-win-over-investors-sources-2023-06-09/
[13] https://about.bnef.com/insights/commodities/venezuelas-oil-renaissance-faces-several-high-hurdles/
[14] https://www.youtube.com/watch?v=6NJ7VWwIx2k Video with subtitles-transcript of the January 9 event
[15] https://edition.cnn.com/2026/01/15/politics/greenland-cnn-poll
[16] https://www.bbc.com/news/articles/c205dx61x76o
[17] https://www.bbc.com/news/articles/c205dx61x76o
[18] https://about.bnef.com/insights/commodities/venezuelas-oil-renaissance-faces-several-high-hurdles/
https://www.lazard.com/news-announcements/lazard-releases-2025-levelized-cost-of-energyplus-report-pr/
[20] https://www.iea.org/reports/electricity-2025
[21] https://www.ft.com/reports/electrification
[22] https://ember-energy.org/app/uploads/2026/01/EMBER-Report-European-Electricity-Review-2026.pdf
[23] https://www.rystadenergy.com/news/upstream-breakeven-shale-oil-inflation
[24] https://www.bloomberg.com/news/articles/2026-01-16/harold-hamm-to-halt-drilling-in-bakken-shale-on-lower-oil-prices
[25] https://corporate.exxonmobil.com/news/news-releases/2026/our-perspective-regarding-the-situation-in-venezuela?print=true#Darrendeliveredthefollowingremarks
[26] https://www.bloomberg.com/news/articles/2026-01-13/totalenergies-ceo-echoes-exxon-s-caution-on-venezuela-oil?srnd=homepage-europe
[27] https://www.ft.com/content/29866a31-2a18-4463-9d61-c237feb5ab54#post-38ac2cff-2402-4a21-a606-d1fb34b8dd9a
[28] https://www.ft.com/content/29866a31-2a18-4463-9d61-c237feb5ab54#post-1eff7697-1c95-4380-83fc-ed653b501b57
[29] https://www.youtube.com/watch?v=6NJ7VWwIx2k Video with subtitles-transcript of the January 9 event
