Energy stocks are having a moment. News that President Donald Trump plans a U.S.-led intervention to topple the Nicolás Maduro regime and pump billions into Venezuela's energy sector sent the sector soaring Monday. But according to Lance Roberts, chief market strategist at RIA Advisors, investors celebrating this rally might want to check their math.

The Supply Problem Nobody Wants to Talk About

The Energy Select Sector SPDR ETF (XLE) jumped 3.66% to an intraday high of $47.32 on Monday as traders piled into names like Chevron Corp. (CVX), betting on a reconstruction bonanza in Venezuela. The thinking goes like this: U.S. oil majors get access to the world's largest proven oil reserves, business booms, everyone wins.

Roberts sees it differently. "That would potentially bring a lot more oil production online, which would suppress oil prices again," he explains. Venezuela sits on 303 billion barrels of proven reserves. That's not a rounding error. When that crude eventually hits the market, basic economics suggests prices go down, not up.

The strategist argues investors are "running ahead of oil fundamentals," pricing in geopolitical victory while ignoring the deflationary reality of adding massive new supply to an already fragile demand picture.

Why $40 Makes More Sense Than $80

Roberts isn't mincing words about his price outlook. "I think oil prices have a bigger risk of going into the forties than the 80s over this year," he noted in recent analysis.

The logic is straightforward: global demand looks shaky amid economic headwinds, and adding Venezuelan barrels creates serious glut risk. Meanwhile, energy stocks have recently detached from their historical correlation with WTI crude, running on speculation rather than supply-demand fundamentals.

When that new Venezuelan production actually comes online over the next 12 to 18 months, Roberts warns that energy stocks will have to "catch down" to the reality of lower oil prices. That's a polite way of saying: what goes up on hype can come down on fundamentals.

The Iran Wild Card

Roberts does acknowledge one major caveat to his bearish thesis. Crude is technically "oversold" in the short term, and immediate geopolitical tensions could spark a temporary spike. Specifically, betting markets show rising odds of U.S. conflict with Iran following the Venezuela operation.

A supply disruption in the Middle East remains the primary upside risk that could override the bearish fundamentals. But without that catalyst, the path of least resistance is lower, not higher.

How Roberts Is Playing It

Rather than bet against the oil rally directly, Roberts is repositioning his portfolio away from pure oil production plays. Instead, he's focusing on energy companies tied to AI power generation, sidestepping the crude price cycle entirely while still maintaining energy sector exposure.

As of early trading Tuesday, WTI crude futures were up 0.36% to around $56.19 per barrel, hovering in a zone that Roberts sees as vulnerable to a move lower once Venezuelan supply realities set in.

Energy ETF Performance Snapshot

For investors considering energy exposure, here's how key sector ETFs have performed:

The divergence between traditional energy ETFs and clean energy plays like ICLN is notable, with the latter significantly outperforming over both six-month and one-year periods.