Thoughts on Energy Transition Risks for Oil Majors

Been thinking a lot lately about how the market is truly pricing in the long-term energy transition for the big oil and gas players. It feels like there's a significant disconnect between the ambitious net-zero pledges and the current valuations. Many of these companies are still heavily reliant on traditional fossil fuel production for their cash flow, and while they're investing in renewables, the scale of that shift is, in most cases, still a drop in the ocean compared to their legacy operations. Are we underestimating the stranded asset risk? Or are investors just betting that the transition will be slow enough for these companies to pivot effectively, or that demand for their core products will remain robust for longer than many climate models suggest?

It's easy to get caught up in the day-to-day fluctuations of WTI and Brent, but looking out a decade or two, the landscape could be radically different. Take the recent $NIKKEI rally; there's a clear narrative around renewed economic activity, but for oil, the long-term structural changes feel less clearly defined in price. I'm keen to hear if anyone thinks I'm missing a crucial piece of the puzzle here, perhaps underestimating the resilience and adaptability of these giants. Push back if you think I'm off base.