Jim Cramer is urging investors to take the oil stocks’ ramp-up with a grain of salt, warning that geopolitics-driven rallies appear more promising at first glance than they ultimately prove to be over time.
His curt take comes amid fresh global turmoil that has jolted the oil patch, following the U.S. intervention in Venezuela on Monday, January 5, 2026.
Consequently, the Dow popped 595 points, breathing new life into oil stocks.
In the past week alone, we’ve seen the biggest energy names posting solid single-digit gains, riding a steep move higher in crude oil prices.
However, in a recent segment on CNBC’s “Mad Money,” Jim Cramer pushed back on the prevailing sentiment that the recent geopolitical stock market will translate into lasting profits.
Cramer added that these moves usually play out over years, not days, which doesn’t favor the latecomers.
Jim Cramer warns investors that oil stock rallies tied to geopolitics may fade quickly.
Big oil’s heaviest hitters by market cap
- Exxon Mobil: $534.44 billion
- Chevron: $330.12 billion
- Shell: $213.32 billion
- TotalEnergies: $142.30 billion
- ConocoPhillips: $123.89 billion Source: CompaniesMarketCap
Cramer says geopolitical oil rallies can be misleading
Cramer’s core argument on “Mad Money” was that big geopolitical stories usually feel like big investment opportunities, but for the most part, rarely turn into big, lasting business wins.
Although there’s plenty of chatter about foreign policy and Venezuela’s future, as investors, the goal is to make durable money. That is exactly where oil rallies tend to disappoint.
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Cramer explains why these stories can be easy for investors to buy into.
Chevron has deep exposure to Venezuela, and in theory could benefit considerably if production increases.
On the other hand, U.S. refiners such as Valero, Phillips 66, and Marathon Petroleum might be able to handle Venezuela’s heavy crude. Additionally, oil-services firms may one day be able to help rebuild infrastructure that has been starved for decades.
The problem, Cramer feels, is time.
Oil stories take years, not weeks
Cramer points to Iraq as a major proof point that rebuilding production takes years. Venezuela’s challenges are even deeper, with the constraints being real; falling oil prices remove that margin for error.
The reality behind the optimism:
- Iraq showed how long ramps usually take:U.S. Energy Information Administration data showed that Iraq didn’t cross 3 million bpd until July 2012, years after the conflict started. Moreover, it averaged 4.0 million bpd in 2015, showing the slow pace of rebuilding.
- Venezuela’s collapse is severe:Reuters reports output dropped from nearly 3.5 million bpd in the late 90s to 1.1 million bpd this year.
- China is a constraint: Reuters says China imports nearly 470,000 bpd of Venezuelan crude in 2025, mostly linked to debt repayment.
- Oil prices are not helping:WTI dropped from $68.39in July 2025 to $57.89 by late December.
Where Cramer sees better value than oil right now
Cramer advises investors to focus on stocks offering reasonable entry points, along with long-term upside.
In doing so, he identified bank stocks, which he argues are trading considerably cheaper relative to the broader market, offering a potential fallback if volatility returns.
Cramer points to large-cap financials, too, in JPMorgan Chase and Citigroup, both of which he says are undervalued, despite robust performances over the past year.
His favorite is Goldman Sachs, which he feels will benefit from an increase in mergers, acquisitions, and stock issuance. It currently trades at 19-times earnings, backed by a massive 83% gross profit margin.
He also touts Capital One, hailing it as one of the cheapest bank stocks out there, following the Discover acquisition. Lower rates will likely boost its positioning, fueling buybacks while its valuation remains mighty compelling (about 12.5 times forward earnings).
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