ONEOK, Inc. (OKE): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of ONEOK, Inc.'s competitive position as we close out 2025, wanting to know if their recent acquisitions have truly cemented their moat. Honestly, the structural picture is one of significant advantage: while rivalry in key basins like the Permian is intense against giants like Enterprise Products Partners, the barriers to entry are massive, with projected 2025 CapEx in the $2.8 billion to $3.2 billion range making replication nearly impossible. Plus, with over 90% of 2025 revenue secured by long-term, fee-based contracts, the bargaining power of their large customers is heavily constrained. Let's map out exactly how these five forces-from supplier leverage to the threat of substitutes-define the competitive landscape for ONEOK, Inc. right now.

ONEOK, Inc. (OKE) - Porter's Five Forces: Bargaining power of suppliers

You're looking at ONEOK, Inc.'s supplier landscape as of late 2025. The power held by the upstream producers who feed ONEOK's midstream assets is a key variable here. Generally, the supplier base is highly fragmented. Think about the sheer number of independent and smaller exploration and production (E&P) companies operating across the Permian Basin, the Mid-Continent, and the Rockies.

This fragmentation inherently keeps supplier power in check because no single producer can dictate terms to ONEOK, Inc. on a system-wide basis. However, you have to watch the basins. For instance, the Rocky Mountain region saw NGL raw feed throughput volumes jump 17% in the third quarter of 2025 compared to the prior year, showing strong local production growth that could, in theory, give those specific producers more leverage if capacity were tight. Still, ONEOK, Inc. has been actively working to lock in volumes.

The recent inorganic moves definitely shift the balance away from the producers. You saw ONEOK, Inc. finalize the acquisition of EnLink Midstream, LLC in January 2025 for a cash consideration of approximately $3.3 billion. Plus, they picked up the remaining 49.9% stake in Delaware G&P LLC in June 2025 for $940 million. The Medallion acquisition, which closed in October 2024 for $2.6 billion, also significantly increased owned assets in the crucial Permian crude gathering system. These acquisitions secure volumes that were previously supplied by third parties, effectively internalizing some of that supply chain and reducing the leverage of external producers.

Despite the acquisitions, there's still volume risk. ONEOK, Inc. needs third-party production to run its pipelines and processing plants at optimal efficiency. If production growth stalls or declines in a specific area, that leaves excess capacity, which can be tough to monetize quickly. For example, the company noted that a decrease in exchange services in Q1 2025 was partly due to lower volumes on the legacy ONEOK system. Also, remember that ONEOK, Inc. doesn't own all the land its assets sit on; the risk of not renewing land rights or securing new ones impacts operations and costs.

The strongest defense against supplier price power is the structure of ONEOK, Inc.'s contracts. The business model is heavily insulated by long-term, fee-based arrangements. This means ONEOK, Inc. collects a set fee for moving or processing the product, regardless of the fluctuating commodity price. This stability is key to your investment thesis.

Here's a quick look at how fee-based revenue underpins this stability across the segments, based on 2025 guidance:

The reliance on these fee structures means that while producers are the source of the physical product, their direct bargaining power over ONEOK, Inc.'s service rates is significantly curtailed. The contracts stabilize service rates, which is what you want to see from a stable infrastructure play. The benefit of the acquisitions is that they lock in volumes that are already under these favorable contracts, like Medallion's transportation contracts being 100% fee-based.

To summarize the supplier leverage points, consider this:

• Supplier base is fragmented across multiple basins.
• Acquisitions of EnLink and Medallion secure volumes.
• Fee-based revenue is projected to exceed 90% of 2025 revenue.
• Land rights ownership creates some operational risk.
• Contract structure mitigates direct price negotiation power.

Finance: draft 13-week cash view by Friday.

ONEOK, Inc. (OKE) - Porter's Five Forces: Bargaining power of customers

When looking at ONEOK, Inc. (OKE), the bargaining power of its customers is generally kept in check, largely because of the essential, integrated nature of its midstream services and the structure of its contracts. You see, ONEOK's customers aren't small retail buyers; they are large, sophisticated entities that need reliable, long-haul capacity.

These major customers primarily consist of refiners, utilities, petrochemical facilities, and industrial companies. For instance, in its Refined Products and Crude segment, ONEOK has access to nearly 50% of U.S. refining capacity, meaning its customer base is concentrated among major energy players. This concentration could imply power, but the nature of the service mitigates that risk.

The primary lever that limits customer power is the high switching cost associated with ONEOK's infrastructure. The company operates an approximately 60,000-mile network of natural gas, NGL, refined products, and crude oil pipelines. This network is integrated, connecting wellhead supply to key market centers like Mont Belvieu. Replicating this system-the non-reproducible asset-is prohibitively expensive and time-consuming for any single customer to do on their own.

Furthermore, the demand side is robust, driven by structural energy needs. ONEOK is strategically positioned to benefit from growing industrial demand, particularly from new markets. The company is directly connected to major LNG and industrial customers, and it is involved in joint ventures to construct a new large-scale 400,000 barrel-per-day liquefied petroleum gas (LPG) export terminal in Texas City. Also, key asset locations in Oklahoma, Texas, and Louisiana are poised to address natural gas demand growth from power plants, including data centers, with $\sim$30 potential expansion projects representing over 4 Bcf/d of potential demand.

The financial structure of ONEOK, Inc. further locks in cash flow stability, which directly correlates to the long-term nature of customer commitments. Over 90% of ONEOK, Inc.'s 2025 revenues is expected to be derived from fees. This fee-based model means that revenue is largely decoupled from volatile commodity prices, and it is secured by long-term contracts, which is a key factor in dampening customer negotiation leverage.

Here's a quick look at the fee-based stability across the main segments based on 2025 guidance midpoints:

The reliance on long-term contracts is evident in the Natural Gas Pipelines segment, where more than 95% of transportation capacity is contracted across the Oklahoma and Texas intrastate systems. This contractual framework, combined with the massive capital investment in infrastructure-with 2025 capital expenditures guided between $2.8 billion to $3.2 billion-creates significant barriers to entry and reduces the immediate threat of customers switching providers.

The customer base is sophisticated, but their needs are inelastic due to the critical nature of the services:

• Customers include major refiners, utilities, and petrochemical companies.
• Long-term contracts secure capacity, such as >95% contracted on key intrastate pipelines.
• Revenue stability is high, with over 90% of 2025 revenue being fee-based.
• Demand is structurally supported by LNG export and data center growth.
• The company's integrated network creates high practical switching costs.

To be fair, the concentration of counterparties, which are major energy companies, does expose ONEOK, Inc. to credit risk if those entities are similarly affected by economic conditions, but the company does not anticipate a material adverse effect based on its reserves and policies. Finance: draft 13-week cash view by Friday.

ONEOK, Inc. (OKE) - Porter's Five Forces: Competitive rivalry

The competitive rivalry within the midstream energy sector, where ONEOK, Inc. operates, remains fierce, driven by the need to secure long-term contracts and manage capacity in high-growth areas. You see this pressure most acutely in key basins like the Permian, which is the engine room for NGL supply. Marketed natural gas production in the Permian Basin is forecast by the U.S. Energy Information Administration (EIA) to reach an impressive 25.8 billion cubic feet per day (Bcf/d) in 2025. This surging supply puts a premium on reliable, large-scale egress infrastructure, which is exactly where ONEOK, Inc. competes head-to-head with its peers.

ONEOK, Inc. faces direct challenges from other large, integrated midstream giants. These key rivals include Enterprise Products Partners, Williams Companies, and Kinder Morgan, alongside other significant players like Targa Resources. To put the scale in perspective, the average revenue for ONEOK, Inc.'s top 10 competitors over the last four quarters stood at approximately $22.1 billion. For context, Williams Companies had a market capitalization around $38 billion as of May 2024. ONEOK, Inc.'s own reported revenue for Q3 2025 was $8.6B, showing it is a major force but operating within a field of behemoths.

Industry consolidation is actively reshaping this competitive field. ONEOK, Inc.'s strategic move to acquire the remaining publicly held common units of EnLink Midstream, which closed in January 2025, immediately reduced the number of independent competitors while simultaneously increasing the scale and integration of the remaining rivals. This was followed by ONEOK, Inc. acquiring the remaining 49.9% stake in Delaware G&P LLC for $940 million in June 2025. These transactions are expected to yield substantial benefits, with ONEOK, Inc. anticipating approximately $250 million in incremental commercial and cost synergies related to acquisitions in 2025 alone.

The primary differentiator for ONEOK, Inc. in this crowded space is its deeply integrated NGL value chain. The company operates a network that includes over 50,000 miles of pipe, connecting supply basins to critical Gulf Coast markets. Specifically within the NGL segment, ONEOK, Inc. boasts eleven fractionators with a combined net operating capacity of 1,155,000 barrels per day (bpd). Furthermore, its strategic expansions, like the looping of the West Texas NGL Pipeline system, are designed to increase capacity to 740,000 bpd by mid-2025, directly addressing the surging Permian volumes. This level of integration helps secure fee-based revenue, with ONEOK, Inc. projecting that over 90% of its 2025 revenue will come from fees.

Here's a quick look at how ONEOK, Inc. stacks up against its largest publicly traded rivals based on recent reported figures:

The competitive environment demands constant infrastructure investment and strategic positioning. ONEOK, Inc.'s focus on high-growth areas and its integrated assets provide a structural advantage, but the sheer size and financial muscle of its main competitors mean that any capacity gap or service disruption is immediately exploited. The rivalry centers on who can most efficiently move the growing NGL volumes out of basins like the Permian.

• ONEOK, Inc. completed the EnLink Midstream acquisition in January 2025.
• ONEOK, Inc. is expanding West Texas NGL Pipeline capacity to 740,000 bpd by mid-2025.
• The Permian Basin is expected to contribute over 180 Mb/d of the total projected 198 Mb/d NGL increase in 2025.
• ONEOK, Inc. expects $870 million in synergies from acquisitions by 2026.
• ONEOK, Inc.'s NGL fractionators have 1,155,000 bpd of net capacity.

ONEOK, Inc. (OKE) - Porter's Five Forces: Threat of substitutes

You're assessing the long-term viability of ONEOK, Inc.'s core business against emerging energy alternatives. Honestly, the threat from substitutes isn't immediate for the vast, established midstream assets, but the trends are definitely worth tracking for future capital allocation.

Long-term threat from rising adoption of renewable energy for power generation.

The power generation sector is seeing movement toward cleaner sources, but for natural gas infrastructure, Renewable Natural Gas (RNG) offers a bridge. RNG resource potential in the U.S. is estimated to be enough to cut greenhouse gas emissions by more than 300 million metric tons every year. What this estimate hides is the cost differential: implementing an RNG strategy using existing infrastructure could be a cost-effective emissions reduction strategy, with costs per metric ton of $\text{CO}_2\text{e}$ reduced being between one-third and one-tenth the cost of all-electric homes using heat pumps. Still, the biomass supply available to produce RNG has increased by 17% since the original 2019 assessment, showing resource growth.

Shift to electric vehicles poses a modest threat to the refined products segment.

For the refined products side of ONEOK, Inc.'s business, the electric vehicle (EV) transition is a clear, long-term headwind, though the impact is currently modest given the scale of the overall market. Global EV sales were projected to hit 10 million by the end of 2025, which could reduce oil demand by 350,000 barrels per day. By the end of 2024, the global electric car fleet already reached almost 58 million vehicles, displacing over 1 million barrels per day of oil consumption in that year alone. To put that in perspective for 2025, battery electric and hybrid vehicles accounted for over half of new car registrations to date. This trend puts downward pressure on gasoline demand, which is a key refined product.

Here's a quick look at the EV substitution metrics:

Pipelines remain the safest, most cost-effective method for long-haul NGL and natural gas transport.

When you look at moving massive volumes of NGLs or natural gas over long distances, pipelines are hard to beat on cost and reliability. Substitute products like Liquefied Natural Gas (LNG) and electricity face significant cost and capacity hurdles for long-haul transport. For instance, while the U.S. natural gas pipeline network is estimated to leak as much as 2.7 million tons of methane per year, the industry is adopting technologies to mitigate this. Furthermore, RNG can leverage the existing system, which is a major cost advantage over building entirely new, non-fossil fuel infrastructure. The continued growth in ONEOK, Inc.'s core volumes shows this reliance persists; NGL raw feed throughput volumes in the Rocky Mountain region increased by 17% in the third quarter of 2025.

No viable, immediate substitute for the existing, vast midstream infrastructure.

The sheer scale of ONEOK, Inc.'s network means any substitute would require monumental, multi-decade investment. ONEOK, Inc. operates an approximately 60,000-mile pipeline network across North America. This infrastructure is deeply integrated across gathering, processing, fractionation, and transportation for NGLs and natural gas. The company's Q2 2025 net income attributable to ONEOK was $841 million, reflecting the ongoing utility of these assets. The threat of a sudden, large-scale replacement is low because of the capital intensity required for alternatives. You can see this reliance in the company's recent performance:

• NGL raw feed throughput increased 17% in the Rocky Mountain region (Q3 2025).
• Natural gas processed volumes rose 3% in the Rocky Mountain area (Q3 2025).
• Total fractionation capacity now exceeds 1 million barrels per day following recent expansions.

The existing infrastructure is simply too embedded to be immediately replaced. Finance: draft 13-week cash view by Friday.

ONEOK, Inc. (OKE) - Porter's Five Forces: Threat of new entrants

The threat of new entrants into ONEOK, Inc.'s core midstream business is structurally low, primarily due to the massive financial and operational hurdles required to establish a competing, integrated network.

Extremely High Capital Barriers

Starting a competing enterprise requires capital expenditure (CapEx) levels that immediately screen out most potential entrants. For the fiscal year 2025 alone, ONEOK, Inc. has projected its total capital expenditures to range between $2.8 billion to $3.2 billion. This level of sustained, multi-billion-dollar investment is necessary just to maintain and incrementally expand existing infrastructure, let alone build a new, comprehensive system from scratch across multiple basins.

Significant Regulatory and Environmental Hurdles

New entrants face a gauntlet of regulatory and environmental challenges that incumbents like ONEOK, Inc. have already navigated or are currently managing. While federal regulators have taken steps in 2025 to ease some construction delays-for instance, the Federal Energy Regulatory Commission (FERC) waived Order 871 for a year in June 2025 to prevent automatic stays during rehearing requests and issued a rule in October 2025 to allow construction during certain appeals, aiming to shorten project development periods by six to 12 months-state and local opposition remains potent. Environmental and clean energy groups continue to file protests against new pipeline applications, citing concerns over market need and environmental impact, which can lead to project rejections or significant redesigns, as seen in past state-level permit denials based on climate laws.

• Federal permitting timelines remain long and complex.
• State-level environmental reviews create significant uncertainty.
• Land use rights and eminent domain proceedings are costly and protracted.
• Opposition can lead to project cancellations due to timing-related cost overruns.

Network Replication Difficulty

A new entrant cannot simply build a few pipelines; they must replicate ONEOK, Inc.'s established, contiguous, and integrated network that spans key production areas. This integration is what drives synergies and provides comprehensive service offerings. ONEOK, Inc. operates an extensive pipeline network of approximately 60,000 miles across its system. Furthermore, recent acquisitions have significantly deepened its footprint in high-growth areas like the Permian Basin, including sole ownership of facilities in the Delaware Basin with a processing capacity exceeding 700 million cubic feet per day.

Here's a look at the scale of ONEOK, Inc.'s existing infrastructure:

Building this level of interconnectedness-linking gathering, processing, fractionation, transportation, and storage across the Permian, Bakken, and Mid-Continent-is a multi-decade undertaking.

Incumbent Advantage from Scale and Contracts

The sheer scale of ONEOK, Inc.'s operations translates directly into long-term revenue stability, a feature new entrants would struggle to match quickly. The business model is heavily reliant on long-term agreements with producers. For the 2025 fiscal year, ONEOK, Inc. projects that more than 90% of its revenues will be derived from fees, building on a foundation where more than 88% of 2024 earnings were already fee-based. These fee-based contracts, often spanning many years, lock in revenue streams and provide a predictable cash flow base that new competitors, lacking established relationships and capacity, cannot easily secure.