S&P 500 Energy Sector Earnings Preview: Q2 2026

With the recent volatility in the price of oil, what do analysts expect for earnings growth for the Energy sector for Q2?

Overall, the Energy sector is currently expected to report the highest (year-over-year) earnings growth rate of all eleven sectors at 122.9%. This growth rate is significantly above expectations for earnings growth of 48.2% on March 31, as the Energy sector has recorded the largest percentage increase in estimated (dollar-level) earnings of all eleven sectors since the start of the quarter at +50.4% (to $52.3 billion from $34.7 billion).

Higher (average) year-over-year oil prices are contributing to the substantial year-over-year increase in earnings for this sector. Despite the decline in price at the end of the quarter, the average price of oil (WTI) in Q2 2026 ($92.55) was 45% above the average price of oil in Q2 2025 ($63.68).

At the sub-industry level, 4 of the 5 sub-industries are projected to report year-over-year growth in earnings: Oil & Gas Refining & Marketing (231%), Integrated Oil & Gas (160%), Oil & Gas Exploration & Production (106%), and Oil & Gas Storage & Transportation (7%). On the other hand, the Oil & Gas Equipment & Services (-19%) sub-industry is the only sub-industry in the sector predicted to report a year-over-year decline in earnings.

Looking ahead, analysts are predicting (year-over-year) earnings growth rates for the Energy sector to decrease over the next 4 quarters. For Q3 2026 through Q1 2027, the estimated earnings growth rates for the sector are 75.6%, 69.5%, and 49.6%, respectively. Analysts project a year-over-year decline in earnings in Q2 2027 (-26.3%).

FactSet Energy analysts Jesse Mercer (Director, FactSet Oil & Gas) and Rachel Koch (Content Manager) co-authored commentary on key trends to watch for oil and natural gas prices and the Energy sector as a whole during this earnings season:

The memorandum of understanding signed by the U.S. and Iran last month raised hopes that the Strait of Hormuz crisis may be nearing a resolution, though meaningful uncertainty remains. Diplomatic efforts have proceeded in fits and starts, and recent Iranian attacks on vessels transiting the Strait continue to inject risk into the outlook. Markets, however, appear to be pricing in a more benign scenario despite continued declines in global liquids inventories. Whether that confidence proves warranted remains to be seen.

Crude prices have retreated in recent weeks, with front-month NYMEX West Texas Intermediate currently trading around $70/bbl. However, WTI averaged slightly above $92/bbl over the second quarter, a level robust enough to drive favorable results for oil-weighted E&P companies in the coming reporting season. The same cannot be said for their natural gas-weighted peers, though, as these operators remain squeezed by a persistently weak price environment for natural gas. NYMEX Henry Hub is currently trading around $3.20/MMbtu, a level that prevailed over much of the past quarter.

U.S. and Canadian oil and gas volumes are on track to grow through the remainder of this year and should continue rising through the end of the decade, though the trajectory will likely prove more gradual than some of the more ambitious forecasts that have circulated over the past four months. Our measured outlook for production sets the tone for what to expect when upstream operators take the stage this earnings season. Most producers opted for a wait and see approach last quarter when conversations centered on the potential for accelerated capital deployment and faster production growth, and the subsequent price action has only reinforced the case for that posture.

For natural gas-weighted producers, a critical signpost will be the commissioning of key infrastructure. The Blackcomb and Hugh Brinson pipelines out of the Permian Basin are both expected to come online later this year, and any updates from E&P management teams or midstream operators regarding construction progress or commissioning schedules will be closely monitored. The timing of these completions will directly determine when additional Permian gas supplies begin reaching the market.

LNG export capacity is an equally important thread to follow this season, particularly the startup timeline for Golden Pass' remaining trains and the broader advancement of Gulf Coast liquefaction projects. Developments around offtake agreements, project financing, and permitting will offer meaningful signals about the pace at which U.S. export capacity expands and, by extension, how domestic gas balances evolve. Taken together, execution on both the pipeline and LNG fronts represents a pivotal variable shaping the remainder of the year for midstream operators and gas-weighted producers alike.

Against this backdrop, guidance is likely to hold largely steady as management teams maintain a cautious stance. We viewed last quarter's restraint as prudent at the time, and little has changed to alter that assessment. Expect company commentary this quarter to strike a tone that is measured yet incrementally more assured relative to prior guidance discussions.

For more detailed analysis, view additional commentary from Jesse Mercer and Rachel Koch. 

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