Oil and gas stocks continued to fall behind the broader stock market in 2024, as outlined in a new report from the Institute for Energy Economics and Financial Analysis (IEEFA). The S&P 500’s fossil fuel components saw a 5.72% return in 2024, compared to the full index’s 25.02%.

These results are becoming a familiar story. The fossil fuel sector has underperformed the S&P 500 in seven of the last 10 years, delivering the lowest performance and highest volatility of any S&P sector. Oil, gas, and coal have been unreliable and inconsistent contributors to long-term investment portfolios.

“The traditional fossil fuel business model faces structural risks in a decarbonizing world, and the industry has yet to demonstrate a coherent…