Midstream's Next Phase: Oil Focus Gives Way to Gas

The historical narrative surrounding the midstream energy sector is undergoing a fundamental shift. For years, energy infrastructure was viewed through the lens of crude oil prices. However, recent market data and structural evolutions point to a shifting narrative, redefining the sector around natural gas demand growth and the multi-decade global electrification story.

For many advisors, the first question regarding midstream is often tied to oil prices. Despite early-year expectations that market oversupply might pressure crude (read more), prices have shown surprising resilience on rising tensions with Iran. However, Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors, recently noted that oil prices are no longer the primary determinant for the sector’s profitability. Most of their business is fee-based and they don’t typically take ownership of the commodity itself, nor do they typically have a lot of exposure to commodity prices.

The data supports this decoupling from the oil price narrative. In 2025, while WTI crude prices fell nearly 20%, the underlying indexes for the Alerian MLP ETF (AMLP A-) and the Alerian Energy Infrastructure ETF (ENFR ) were up 8% and 7%, respectively on a total-return basis. This trend is not a fluke. From the end of 2022 to the end of 2025, WTI was down nearly 30% while the underlying indexes for AMLP and ENFR — the Alerian MLP Infrastructure Index (AMZI) and Alerian Midstream Energy Select Index (AMEI) — were up 70% and 77% respectively on a total-return basis.

The diversification of the customer base for energy infrastructure companies over the last few years has been a sight to behold, Baiocchi said. While the crude business remains steady, the natural gas side is seeing a massive expansion in liquefied natural gas (LNG) export capacity (read more). Gas is now being routed toward liquefaction facilities with cargoes destined for Europe and Asia, creating an entirely new customer base that didn’t exist a decade ago.

Perhaps more intriguing for growth-oriented advisors is the emergence of “behind the meter” deals. Midstream companies are now building lateral pipelines specifically earmarked for AI data center projects. According to Baiocchi, this is a direct-to-consumer type of model that underscores why energy infrastructure is part of the AI story in a way that investors aren’t yet fully considering on an ongoing basis.

This “electrification of everything” is a 25-year secular trend that will continue to serve as a massive tailwind for natural gas. Currently, natural gas accounts for roughly 42% of U.S. electricity generation. As AI data centers, EV fleets, and residential shifts toward heat pumps and induction stoves aggregate, the demand for reliable, immediate power generation becomes critical, Baiocchi said.

For advisors, the choice between AMLP and ENFR often comes down to specific client objectives. While AMLP remains a powerhouse for yield, ENFR’s diversified structure offers more exposure to the natural gas infrastructure that sits at the heart of the electrification story. Just over 70% of ENFR’s underlying index by weighting primarily focuses on natural gas infrastructure as of February 26. 

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