At the dawn of the novel coronavirus outbreak, perhaps the sector that attracted the most skepticism was oil stocks. For one thing, the price of crude oil fell below zero, an absurd and unprecedented phenomenon. And while prices quickly recovered, the rally didn’t take away from the fact that millions of Americans curbed their travel to avoid getting infected.

Therefore, several market commentators — including yours truly — suggested avoiding oil stocks. Personally, I didn’t hate the crude market. It’s just that investors must look at reality. As data from the Bureau of Transportation Statistics revealed, trips involving distances up to 25 miles were down substantially from the year-ago level. To say the least, that’s not encouraging.

About the only institutions that were “happy” about the erosion in oil stocks were clean energy advocates. With fewer people on the road, emissions naturally declined, providing a positive side effect. Curiously, though, the International Energy Agency noted one major exception: emissions from fuel-hungry sport utility vehicles.

Although the “world’s overall energy-related emissions fell by an estimated 7% this year … emissions from SUVs, which are typically larger and less fuel-efficient than other cars, are estimated to have seen a slight increase of 0.5%.” Additionally, “SUVs consumed more oil last year than they did in 2019.” Not helping matters is that sales of SUVs grew to 42% of the worldwide car market in 2020, a record.

Furthermore, consumers have continuously increased demand for larger vehicles. Even more problematic from an environmental perspective, it’s not just American buyers. Rather, people from Europe and China are opening their wallets for SUVs, which portends more fossil fuel consumption and emissions. Yes, it’s cynical but this dynamic may help provide a contrarian spark for these oil stocks:

• Exxon Mobil (NYSE:XOM)
• Chevron (NYSE:CVX)
• ConocoPhillips (NYSE:COP)
• Total (NYSE:TOT)
• Royal Dutch Shell (NYSE:RDS.A, NYSE:RDS.B)
• EnLink Midstream (NYSE:ENLC)
• Helix Energy Solutions (NYSE:HLX)

Before we explore this carbon-based narrative, you don’t want to go too crazy with this sector. Although the crude price per barrel has risen substantially since last November, this is a volatile market. Nevertheless, if you’ve got some cash dedicated to speculation, these oil stocks could be on the rise.

Oil Stocks: Exxon Mobil (XOM)

While all oil stocks were mired in the doldrums when the pandemic launched its first major volley, Exxon Mobil might as well be the poster child of this sector’s utter devastation. With a corporate heritage that dates back to John D. Rockefeller and Standard Oil, XOM stock is essentially an American icon. Obviously, that didn’t exempt shares from printing red ink all over the technical charts.

But the ignominy didn’t end there. Once a fixture of the Dow Jones Industrial Average, XOM stock found itself being kicked out of the venerable index. But in a strange way, that just might be the ticket for Exxon Mobil to engineer a recovery.

According to Barron’s, recent history “suggests that stocks exiting the index do better one year after their removal than those that were added.” Part of the reason why could be due to less pressure for the exiting organization. While being listed on the Dow is a great honor, it’s also a great responsibility since the world is watching. Now, management can think clearly with less anxiety.

That’s not a guarantee of anything, I must say. However, if you want to gamble on oil stocks, you may wish to give Exxon Mobil a chance.

Chevron (CVX)

With the departure of Exxon Mobil, rival Chevron is now the only company among oil stocks included on the Dow 30. However, if the sector encounters another downturn, I wouldn’t expect CVX stock to stay there much longer. Particularly with the Biden administration, most Americans are ready to turn a new chapter. In part, that means less fossil fuels and more renewable and clean energy sources.

On the surface, that bodes poorly for Chevron and other oil stocks. Again, this is why I don’t think investors, even the ones that are true contrarians at heart, should go crazy. You just don’t know the plot twists that may be awaiting your risky decision.

On the other hand, with Covid-19 cases declining conspicuously, it might not be appropriate to call for the end of CVX stock. Yes, some distractions exist, most notably the threat of a credit rating downgrade. Such downgrades are problematic for major firms because they impact the cost of financing.

However, imposing draconian obstacles on a massive job market — 9.8 million workers strong, according to the American Petroleum Institute — is probably out of the question.

ConocoPhillips (COP)

We’re living in crazy times where embattled businesses that really have no business seeing their equity valuation move higher are enjoying triple to even quadruple-digit gains over the trailing year. But it’s not just the latest headline stocks. Throughout this pandemic, many worker bees have used their newfound extra time to divert their funds to the equities sector.

Logically, this means there are fewer viable upside plays available. But if you’ve got the contrarian bug, names like ConocoPhillips are appealing. On a year-to-date basis, COP stock has gained less than 3%, which is pedestrian in the new normal. Over the trailing 12 months, ConocoPhillips shares are down over 33%.

If you want a discount, COP stock seems like one. But can it deliver from here on out?

Honestly, the headlines don’t look so hot. According to the New York Times, President Biden has directed “federal agencies to determine how expansive a ban on new oil and gas leasing on federal land should be, part of a suite of executive orders that will effectively launch his agenda to combat climate change.”

Here’s what I keep going back to: jobs. Killing oil stocks will put millions out of work. At this point, the climate virtue signaling may not be worth the squeeze.

Total (TOT)

Although oil stocks have a bad reputation, some of the criticisms is not deserved. On paper, the narrative doesn’t look great, let’s be real. As climate advocates criticize, the impact to the environment has been staggering. At the same time, we have benefitted tremendously from the fossil fuel industry, let’s also be real.

Unless you know a way to fly across the world aside from jet propulsion, we all contributed to the problem. Frankly, I doubt that people at large are willing to make the big sacrifices necessary to truly live an emissions-free culture.

But that’s a different topic for a different day. Right now, the immediate alternative for oil giants is to also play the renewables game. That’s what France’s Total did, recently acquiring the “largest renewable energy portfolio among European oil supermajors since Big Oil started announcing last year net-zero targets,” according to OilPrice.com. Subsequently, TOT stock is closer to rising to its price point just before the pandemic relative to other oil stocks.

As well, the French economy isn’t exactly firing on all cylinders, likely contracting 4% in the fourth quarter last year. Thus, the government killing one of its own labor markets probably isn’t in the cards, which may give TOT stock a reprieve.

Royal Dutch Shell (RDS.A, RDS.B)

Among major European oil stocks, Royal Dutch Shell stands out as an anomaly. The company hasn’t yet made a multi-million dollar deal in renewable energy solutions since announcing its net-zero emissions goal in April 2020. This stands in sharp contrast to competitors like Total. Naturally, this raises skepticism toward RDS stock.

However, if you think that Royal Dutch Shell is falling behind the others in the burgeoning green space, I wouldn’t worry too much about it. I’m not saying it’s not a concern. Clearly, with investor sentiment moving firmly toward clean energy infrastructure, RDS stock seems an anachronistic play. Still, I’m not 100% convinced that the renewable transition will occur without a hitch.

Admittedly, renewable technologies have improved dramatically over the last several years. They’ve become more affordable for the everyday consumer. Yet the major roadblock is that energy sources like wind and solar are intermittent. Therefore, fossil fuels provide energy on the margin when renewables are “offline.” That’s not badmouthing renewables; that’s just science.

Still, many investors have already written off big oil as irrelevant. But this could very well be the contrarian catalyst for RDS because it’s likely not true: fossil fuels will be relevant for a good long time.

EnLink Midstream (ENLC)

For the final two ideas on oil stocks, I’m going to dedicate to the speculative side of this sector. Check that — they’re all speculative at this juncture. However, these are even more so due to the realities of the market. I’m not saying these are bad companies per say but you’ll need to be extra careful.

First up is EnLink Midstream. If you believe in an eventual economic recovery, you may want to include ENLC stock to the speculation portion of your portfolio. Currently priced under $5, EnLink has the potential to bring big gains to reward your brave contrarianism. If I’m interpreting the charts correctly, ENLC has been printing a bullish pennant/flag formation between the beginning of October till now.

If the interpretation is correct, ENLC stock probably has a better than 50/50 chance of swinging higher. If you want to know how powerful this technical pattern is, check out what happened to this sports betting company and this coffee shop after the formation developed.

Fundamentally, EnLink makes sense (again, as a risk-on trade) because of its midstream business. Yes, it’s a tough environment but it’s not as if demand will completely collapse. If you can stomach some volatility, you may want to check this one out.

Helix Energy Solutions (HLX)

In my opinion, Helix Energy Solutions is the most contrarian opportunity on this list of oil stocks. As a services provider for the offshore exploration industry, HLX stock is not for the faint of heart. Mainly, this is because the concept of drilling for more oil in a deflated economy doesn’t seem to make much sense. Yes, traffic is improving but it’s not at the rate where it used to be pre-pandemic.

Also, politics has taken a turn for the green. That doesn’t leave much room for fossil fuels on paper.

Nevertheless, I believe that the environmental argument — particularly the subsegments about electric vehicles — is overdone. As I mentioned above, Americans love their SUVs. However, virtually all large EVs are prohibitively expensive for regular income earners. Therefore, we’re still going to need a robust fossil fuel infrastructure to keep up with demand.

Granted, this isn’t a popular subject, but the international combustion engine is also making improvements. Unless we have a profound paradigm shift in EV battery technology, oil will be relevant for a long time. That’s the broader case for HLX stock but like other risky plays, you should be careful.

On the date of publication, Josh Enomoto held a long position in ENLC.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.