Breaking Down Midstream/MLP Performance for 2025

• Midstream energy infrastructure tracked broader energy performance in 2025, delivering positive total returns driven by dividend income despite a noticeable pullback in oil prices.
• Reversing what was seen in 2024, MLPs outpaced their C-Corp counterparts helped by their higher yields.
• Heading into 2026, the sector remains well-positioned to generate free cash flow, supporting continued dividend growth and buybacks.

Despite double-digit declines in oil prices amid global oversupply concerns, North American energy infrastructure held its ground in 2025. Following a multi-year run of strong outperformance, the sector saw returns moderate last year, tracking closer to broader energy performance. Today’s note reviews the midstream sector’s 2025 performance and examines the factors that helped MLPs outperform their C-Corp counterparts.

The energy sector underperformed the broader market for the third straight year in 2025. The S&P Energy Select Sector Index (IXE) gained 8.0%, compared to a total return of 17.9% for the S&P 500, which was driven higher by strong gains in the technology sector.

While energy clearly lagged, its positive performance is notable, considering the U.S. oil benchmark was down 19.9%, ending the year at $57 per barrel. While oil and gas producers and oilfield services tend to be sensitive to oil price weakness, U.S. refiners had a solid year. Refiners generally benefit from lower oil prices and enjoyed strong margins this year. Refining bellwether Valero Energy (VLO) was up over 30% on a price-return basis.

Since the end of 2022, midstream has handily outperformed the broader energy sector. However, performance for 2025 was more in line with the sector. Following a 40+% total return for 2024, the Alerian Midstream Energy Index (AMNA), the broad North American benchmark for energy infrastructure companies, gained 5.0% on a total-return basis for 2025.

Midstream tends to be less sensitive to commodity price moves given fee-based business models. However, lower oil prices raised concerns about U.S. production trends and the volumes for midstream. Additionally, midstream names focused on natural gas infrastructure faced a higher bar in 2025 after very strong performance in 2024. Within midstream, MLPs outperformed their C-Corp counterparts, turning the tables from what was seen in 2024.

For 2025, the Alerian MLP Index (AMZ) gained 9.8% on a total-return basis, which outpaced the broad energy benchmark. AMZ also outperformed the 5.8% total return for the Alerian Midstream Energy Corporation Index (AMCC). The performance difference in 2025 was largely driven by AMZ’s higher yield.

At the end of 2025, AMZ was yielding 7.5% compared to 4.3% for AMCC. MLPs have historically provided higher yields than their C-Corp counterparts. Midstream also offers more attractive yields than the broader energy sector, with the IXE yielding 3.4% at the end of 2025.

For additional context, the performance difference between MLPs and C-Corps in 2024 was much more significant. In 2024, AMCC saw outsized gains of 47.5% as C-Corps focused on natural gas pipelines rallied, while AMZ was up 24.4% that year.

After four consecutive years of double-digit gains, energy infrastructure saw more modest performance in 2025. Total returns were largely driven by generous dividends, which remain attractive in a lower interest rate environment.

Looking ahead to 2026, energy infrastructure companies remain well-positioned to generate free cash flow, supporting ongoing dividend growth and buybacks. For a deeper look into the macro landscape, company guidance so far, dividend expectations, and more, read our full 2026 midstream outlook here.

For the latest updates on the energy infrastructure space as well as a look ahead, don’t miss our next webcast “What’s in the Pipeline for MLPs/Midstream in 2026?” on Wednesday, January 14, 2026 at 2 pm ET. Follow the link here to register.

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AMZ is the underlying index for the JPMCFC Alerian MLP Index ETN (AMJB), the ETRACS Alerian MLP Index ETN Series B (AMUB), and the ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN (MLPR).

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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMJB, AMUB, and MLPR, for which it receives an index licensing fee. However, AMJB, AMUB, and MLPR are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMJB, AMUB, and MLPR.

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