In a global energy landscape perpetually reshaped by geopolitical tremors, a recent agreement between the United States and the European Union has quietly laid the groundwork for a profound shift, one that CNBC’s Jim Cramer believes could be a colossal boon for a select group of American companies.
While the broader market seemed to shrug with indifference, Cramer, ever the contrarian, views the details of this transatlantic pact as a game-changer, particularly for the intricate “natural gas food chain” stateside.
The deal, unveiled earlier this week, signals a significant recalibration of trade relations.
Beyond a more palatable 15% tariff on most European imports – a stark contrast to the previously threatened 30% – the true headline for energy markets lies in the European Union’s staggering commitment: a pledge to purchase $750 billion worth of U.S. energy over the next three years, translating to approximately $250 billion annually.
This isn’t merely a commercial transaction; it’s a strategic pivot, driven by Europe’s urgent and growing imperative to decouple from its long-standing, politically volatile reliance on Russian natural gas.
The escalating geopolitical risks associated with Moscow’s energy leverage have finally compelled European nations to diversify their supply sources with unprecedented resolve.
Cramer, speaking on his Mad Money program, expressed palpable surprise at the market’s muted reaction to what he considers a momentous development.
In his estimation, investors are significantly underestimating the long-term implications of such a substantial, multi-year commitment.
For companies operating along the American natural gas supply chain, this agreement offers not just a clearer path forward, but an extended runway to capitalize on what promises to be sustained, robust demand from a continent desperate for energy security.
The beauty, as Cramer sees it, lies in the newfound “visibility” – a predictable demand horizon that allows for strategic investment and expansion.
This isn’t just about selling more gas; it’s about reshaping supply chains and bolstering energy independence for a crucial ally.
Cramer meticulously identified eight American companies poised to ride this wave, each playing a distinct role in getting natural gas from the ground to European shores.
Leading the charge among the natural gas producers, Cramer pointed to EQT Corporation, an exploration and production giant with expansive operations across the Appalachian Basin.
Having acquired Equitrans Midstream, EQT now proudly touts itself as “America’s only large-scale vertically integrated natural gas producer.” For Cramer, EQT is the quintessential pure-play on natural gas, a stock he already favored, making the EU deal a welcome, albeit unexpected, bonus.
Its long-term performance, including a 51% surge over the past year, underscores its resilience even before this new impetus.
Another producer Cramer highlighted was Coterra Energy Inc., which he admitted was “out of favor.” Coterra’s appeal, in Cramer’s view, lies in its operational optionality – the ability to strategically emphasize either crude oil or natural gas production based on market conditions. Should the EU deal indeed lead to sustainably higher natural gas prices in the U.S., Coterra is well-positioned to lean into its gas business.
The company also offers a respectable 3.7% dividend yield, though Cramer acknowledged concerns about its current oil segment.
Moving down the “food chain” to the vital midstream infrastructure, Energy Transfer LP emerged as a significant beneficiary.
With a staggering network of nearly 107,000 miles of pipeline and vast storage capacity, Energy Transfer is a behemoth in natural gas gathering, processing, and transportation. Cramer lauded its long-term performance, noting the stock has roughly tripled over the past five years. Beyond the potential EU trade benefits, investors can, as Cramer put it, “sit back and collect big fat dividends,” with Energy Transfer boasting an attractive 7.5% yield.
Similarly, ONEOK, Inc., another pipeline company, caught Cramer’s eye for its strong presence in bringing natural gas to the Gulf Coast, the nexus of U.S. LNG export infrastructure. While its 5% dividend yield is lower than Energy Transfer’s, Cramer suggested ONEOK, currently down over 30% from its late-2024 highs, could offer more upside potential.
The critical link of liquefied natural gas (LNG) export facilities brought Cheniere Energy, Inc. into focus. As the largest LNG producer in the country, with facilities in Sabine Pass and Corpus Christi, Cheniere already ships substantial volumes of gas to Europe. Cramer deemed it the “obvious winner” from the EU deal, even expressing his belief that its stock “should have gone higher” than its modest jump on the news.
If Europe truly follows through on its commitments, Cheniere stands to gain significantly.
Further along the export chain, Venture Global, Inc., an LNG exporter that only went public earlier this year, was also named. While the company has a controversial past, having sold LNG cargoes at high spot prices despite prior lower-priced contracts, Cramer acknowledged its potential. A recent deal to send LNG from Louisiana to Central and Eastern Europe via a Greek terminal positions it as a direct beneficiary of the new trade landscape, though Cramer cautioned that much of its production remains locked into older, less lucrative contracts, limiting its immediate upside.
Finally, the specialized services essential for global LNG trade were highlighted. FLEX LNG Ltd., with its fleet of 13 purpose-built LNG transport ships, plays a crucial role in shipping the super-cooled gas across oceans. Cramer noted its sky-high dividend yield, exceeding 12%, a figure that would typically send shivers down an investor’s spine. Yet, Cramer insisted on its safety, citing the company’s numerous long-term agreements with customers.
Completing the chain, Excelerate Energy, Inc., offers unique “floating storage regasification units” (FSRUs) that convert LNG back into natural gas upon arrival. These specialized vessels are crucial for countries lacking extensive existing infrastructure, enabling them to quickly accept LNG cargoes.
While Excelerate Energy’s stock has been largely stagnant since its IPO three years ago, Cramer believes the EU’s urgency to accelerate LNG imports could provide a much-needed “nice bump” for its business.
Cramer’s analysis serves as a compelling reminder that beneath the headline figures of trade agreements often lie profound, long-term shifts in supply and demand that can reshape entire industries. While the market’s initial reaction may have been subdued, the strategic imperative driving Europe’s energy diversification, coupled with America’s burgeoning natural gas resources, creates a fertile ground for these companies.
As always, Cramer advised individual investors to conduct their own due diligence, but he has certainly provided a potent roadmap for those looking to capitalize on this evolving energy paradigm.
