In April 2025, oil prices dropped significantly, marking the worst decline since November 2021. West Texas Intermediate (WTI) futures fell about 16%, closing below $60 per barrel. Brent crude dropped nearly 17%, ending just above $63.
Several factors caused this decline, including rising trade tensions, fears of a recession, weak economic data from China, and Saudi Arabia’s decision to accept lower prices to gain market share. As OPEC+ countries consider increasing production, continued low oil prices may impact the energy sector.
Despite this volatility, there is a good opportunity for investors looking for income. Many high-yield master limited partnerships (MLPs), especially in the midstream sector, have seen their unit prices decline.
This has increased their already attractive yields. Unlike companies that explore and produce oil, midstream MLPs mainly earn money from long-term contracts to transport, store, and process oil and gas. This business model helps them remain stable when commodity prices drop, making their payouts more reliable.
Four High-Yield MLPs Now Available
- MPLX LP (NYSE: MPLX)
MPLX is a major midstream MLP created by Marathon Petroleum. It has a large network of pipelines, storage facilities, and processing plants across the U.S. Its consistent cash flow supports a strong dividend yield. Analysts are optimistic about MPLX, with major firms giving it Buy ratings and price targets above current levels. - Enterprise Products Partners (NYSE: EPD)
Enterprise Products Partners is one of the largest and most diverse MLPs, managing over 50,000 miles of pipelines. EPD consistently grows its dividend and offers a yield near 7%, making it an excellent option for income-focused investors. Its size and integration within the energy sector provide stability in uncertain markets. - Energy Transfer LP (NYSE: ET)
Energy Transfer has a vast pipeline network of over 120,000 miles, transporting about 30% of the nation’s natural gas. With a yield close to 7%, it is a solid investment for those seeking income. While the company has adjusted its payout in the past, it has recently returned to dividend growth. - Magellan Midstream Partners (NYSE: MMP)
Magellan specializes in transporting and storing refined petroleum products and crude oil. It has nearly 10,000 miles of pipelines and a history of increasing distributions. MMP offers a yield over 8%. Its long-term contracts and strategic assets help it manage changes in oil prices.
For investors looking for a simpler option without K-1 tax forms, the ALPS Alerian MLP ETF (NYSE: AMLP) provides a selection of top MLPs and pays a substantial yield, making it a good choice for passive income.
Outlook: Opportunity in Uncertainty
While the recent decline in oil prices has disrupted markets, midstream MLPs remain strong income generators. Their fee-based business models and essential roles in energy help protect them from major price falls.
With yields at high levels and prices low, these MLPs present a chance for investors to gain substantial passive income, as long as they are aware of the risks associated with the sector.
Investors should always consult with financial advisors to make sure these investments fit their income needs and risk levels.