Striking Oil in Opportunity Zones: Now Might Be the Best Time to Invest
You could unlock hidden wealth in QOZs with strategic oil and gas investments, potentially combining tax advantages with long-term growth in an essential industry.


In the ever-changing landscape of investment opportunities, sometimes the most lucrative prospects are found where others aren't looking. As we navigate through 2025, one such overlooked gem might be right under our noses — or, more accurately, under our feet.
You've heard it a thousand times: "Buy low, sell high." It's the mantra of successful investors worldwide. But in today's market, with years of gains priced in, where can we find that elusive "low" with the potential to soar?
The answer might surprise you: the energy sector, specifically oil and gas investments within qualified opportunity zones (QOZs).

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Now, I know what you're thinking. "Oil and gas? In 2025? Aren't we moving toward green energy?" Yes, we are — but not as quickly as some might have believed.
The reality is that our world still runs on fossil fuels and will continue to do so for the foreseeable future. This disconnect between perception and reality is creating a unique investment opportunity.
Let's break it down
1. Market undervaluation. The energy sector lagged in 2024, with many investors shying away due to environmental concerns and the push for renewables. This led to depressed valuations across the board, from exploration companies to midstream operators.
2. Technological advancements. The oil and gas industry isn't stagnant. Innovations like hydraulic fracturing and horizontal drilling have revolutionized production capabilities. The U.S. has the potential to be a net energy exporter, a scenario that was unthinkable just a decade ago.
3. Ongoing demand. Despite the buzz around electric vehicles and renewable energy, global demand for oil and gas continues to grow, not shrink. The transition to green energy is happening, but it's a marathon, not a sprint. The simple truth is, the world is likely to always have a need for oil and gas.
4. QOZ tax benefits. Qualified opportunity zones offer significant tax advantages, including deferred capital gains taxes and potential tax-free growth if held for at least 10 years.
Why these QOZ funds are so interesting
Now, let's talk about why QOZ funds focused on oil and gas are particularly intriguing.
First, many QOZs are located in areas rich in energy resources. Texas, Pennsylvania and Louisiana — all home to major oil and gas fields — have multiple designated opportunity zones. This geographical alignment creates a perfect window of opportunity.
Second, the structure of QOZ funds aligns well with the capital-intensive nature of oil and gas projects. These funds must deploy capital quickly and maintain most of their assets in qualified properties — a natural fit for energy infrastructure investments.
Last but not least, the 10-year holding period required to maximize QOZ tax benefits matches the long-term nature of energy investments. Oil and gas projects often take years to develop and reach peak production, aligning nicely with the QOZ timeline.
What are the risks?
But what about the risks? Sure, they exist. There's no such thing as a risk-free investment. The push toward renewable energy is real, and regulatory changes could impact the industry.
However, these risks are largely priced into current valuations, creating an attractive risk-reward profile for savvy investors.
Moreover, the transition to green energy just isn't as straightforward as it might seem. Electric vehicles, often touted as the future of transportation, come with their own set of challenges, from rare metal mining (an environmental nightmare) to electricity generation (which remains largely dependent on fossil fuels, especially coal).
The reality is, oil and gas will play a crucial role in our energy mix for decades to come.
As a financial adviser based in Texas, I've seen firsthand the explosive potential of oil and gas investments. I've also witnessed the transformative impact of QOZ investments on local communities. Combining these two powerful forces could not only yield significant returns but also contribute to economic development in underserved areas.
Of course, like any investment, due diligence is crucial. Not all QOZ funds are created equal, and the specific focus of an oil and gas fund can greatly impact its risk-and-return profile. It's essential to thoroughly research any fund's strategy, management team and track record before investing.
Contrarians, take note: While the crowd chases the next big tech stock or cryptocurrency, savvy investors might want to look toward the oil fields. QOZ funds focused on energy present a unique opportunity to potentially benefit from both tax advantages and the long-term prospects of an essential industry.
Successful investing often means having the courage to zig when others zag. In 2025, as the energy sector lags and QOZ funds offer unprecedented tax benefits, that zag might just lead you to strike oil. The oil and gas sector within QOZs could be a classic overlooked opportunity, offering a chance to truly "buy low" with the potential to "sell high" down the road.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Daniel Goodwin is a Kiplinger contributor on various financial planning topics and has also been featured in U.S. News and World Report, FOX 26 News, Business Management Daily and BankRate Inc. He is the author of the book "Live Smart - Retire Rich" and is the Masterclass Instructor of a 1031 DST Masterclass at www.Provident1031.com. Daniel regularly gives back to his community by serving as a mentor at the Sam Houston State University College of Business. He is the Chief Investment Strategist at Provident Wealth Advisors, a Registered Investment Advisory firm in The Woodlands, Texas. Daniel's professional licenses include Series 65, 6, 63 and 22. Daniel’s gift is making the complex simple and encouraging families to take actionable steps today to pursue their financial goals of tomorrow.
-
2026 Disney Dining Plan Returns: Free Dining for Kids & Resort Benefits
Plan your 2026 Walt Disney World vacation now. Learn about the returning Disney Dining Plan, how kids aged three to nine eat free, and the exclusive benefits of staying at a Disney Resort hotel.
By Carla Ayers
-
How Can Investors Profit From AI's Energy Use?
Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
By Jacob Schroeder
-
How Can Investors Profit From AI's Energy Use?
Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
By Jacob Schroeder
-
Americans Are Retiring Later: Will This Trend Last?
Given a host of pressures to keep working, Americans are retiring later in life. Will regulatory and economic forces encourage you to work longer?
By Christy Bieber
-
Can Trump Fire Powell? A Supreme Court Case Could Decide
Presidential posts threaten to overwhelm decades of precedent and tradition, whatever the nine justices decide.
By David Dittman
-
What Are AI Agents and What Can They Do for You?
AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
By Tom Taulli
-
Should You Buy an iPhone Now Before Tariffs Hit?
Looming tariffs can make an iPhone purchase seem urgent. Here's what to do if you need another phone but want to save money.
By Laura Gariepy
-
Retiring Without a Partner? How Singles Can Maximize Their Savings
Retirement can be expensive, especially when you do it alone, surveys show. But there are ways to maximize your retirement savings even when facing your second act without a partner.
By Kathryn Pomroy
-
SRI Redefined: Going Beyond Socially Responsible Investing
Now that climate change has progressed to a changed climate, sustainable investing needs to evolve to address new demands of resilience and innovation.
By Peter Krull, CSRIC®
-
Here's When a Lack of Credit Card Debt Can Cause You Problems
Usually, getting a new credit card can be difficult if you have too much card debt, but this bank customer ran into an issue because he had no debt at all.
By H. Dennis Beaver, Esq.