Petroleum sits at the heart of the modern economy. From fuelling cars and planes to serving as the foundation for plastics and chemicals, this versatile resource shapes our daily lives. But as the world shifts toward renewable energy, the petroleum sector—and the ways Australians can invest in it—are evolving rapidly. In this guide, we unpack what petroleum is, why it remains crucial in 2025, and how you can tap into its investment potential.
Petroleum is a naturally occurring liquid found in rock formations beneath the Earth’s surface. Composed mainly of hydrocarbons, it’s formed over millions of years from ancient organic matter. After extraction, petroleum is refined into fuels like petrol, diesel, and jet fuel, as well as countless petrochemicals used in everyday products.
In Australia, the biggest petroleum basins include the Carnarvon (WA), Cooper (SA/Qld), and Gippsland (VIC) basins. The sector is a major employer and export earner, with liquefied natural gas (LNG) now surpassing coal as the nation’s top energy export.
Despite the global push toward decarbonisation, petroleum remains essential for several reasons:
However, the landscape is shifting. The Australian government’s 2025 National Gas Strategy emphasises a “transition-ready” sector—balancing reliability and emissions reduction. This means investors must navigate both the enduring value of petroleum and the risks from climate policy, global price swings, and the rise of renewables.
There’s more than one way to gain exposure to petroleum’s fortunes. Here are the main options in 2025:
Australia boasts several major oil and gas producers, including:
In 2025, these companies face both opportunity (strong Asian LNG demand, new discoveries) and challenge (carbon pricing, regulatory scrutiny).
If you prefer diversification, consider exchange-traded funds (ETFs) or managed funds focused on energy:
These options can cushion against volatility in individual stocks while providing broad petroleum exposure.
For those willing to look offshore, direct investment in global giants—such as BP, Chevron, or TotalEnergies—or oil futures contracts is possible via international brokerages. However, these options carry currency and geopolitical risks.
Some investors opt for companies that support petroleum production—like pipeline operators, drilling contractors, or shipping firms. These “pick-and-shovel” plays can offer steadier returns, especially as energy transitions unfold.
In 2025, investors are watching the rollout of new offshore acreage releases, updates to the Petroleum Resource Rent Tax (PRRT), and global moves toward net zero emissions. Savvy investors weigh these factors alongside the sector’s traditional strengths.
Petroleum remains a cornerstone of the Australian and global economy, even as the world accelerates toward cleaner energy. For investors, it offers both risk and reward: exposure to a vital resource, but also to price swings and policy shifts. Whether you prefer direct shares, ETFs, or infrastructure plays, understanding the evolving landscape is key to making smart, future-proof investment choices.