Oil market participants have been focused on the Iran conflict since late February, when U.S. and Israeli strikes on the Persian Gulf nation upended global energy markets.
Since then, the international crude benchmark shot from the low $70s per barrel before the war to nearly $120 before easing back to current prices in the low-to-mid $90s. That’s helped make the energy industry the best-performing S&P 500 sector in 2026, with it up about 25% compared with the broader index’s 2% gain.
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In short, oil prices have been volatile. While the cause of the volatility is new, large price swings are par for the course for one of the world’s most important commodities. Over the long run, that volatility dampens the energy sector’s appeal. The sector’s roughly 79% rise over the past 10 years pales in comparison to the S&P 500’s 235% gain.
In other words, trying to play short-term moves in oil prices is risky but can provide a lot of return. Over the long run, energy companies do add shareholder value, but because of the volatility don’t expect them to be the best performers in your portfolio.
“A major risk for U.S.-based oil-producing corporations is that a swift end to the Iran conflict could result in a nasty shock in the opposite direction, a sharp increase in oil production and delivery overseas, and a decrease in demand for our oil,” says Brian Huckstep, chief investment officer at Advyzon Investment Management. “If expensive oil rigs managed by U.S. corporations are turned on and then quickly become unneeded, it could result in large losses.”
Oil as an Inflation Hedge
One advantage to investing in oil is that it, like other commodities, can be an inflation hedge. That can be because its use, and price, goes up during times of heightened economic activity. Or, like in oil’s case right now, a supply shock that causes energy prices for consumers and businesses to rise also boosts oil as a commodity and share prices of producers as investments.
“Constrained supply due to the Iran conflict has led to much higher prices for oil, and I expect this to carry into the broader market at the April 30 inflation reading,” Huckstep says. On that date, the U.S. Bureau of Economic Analysis is scheduled to release the personal consumption expenditures price index, a key reading that is the Federal Reserve’s preferred measure of inflation.
For now, oil producers are benefiting from war in the Middle East, with the State Street SPDR S&P Oil & Gas Exploration & Production ETF (ticker: XOP) up 30% year to date.
Iran War’s Effect on Natural Gas Prices and Stocks
Meanwhile, the conflict in Iran has also crimped supply of liquefied natural gas shipped through the Strait of Hormuz. U.S. natural gas prices have been largely unaffected because of domestic production, high storage levels and a move toward warmer temperatures that require less natural gas for heating.
But exports to Europe and Asia are a key reason to invest in natural gas. Natural gas prices in those regions, even before the latest Iran conflict, are typically much higher than those in the U.S., prompting companies to invest in large plants to chill the commodity for export by sea.
Natural gas is also expected to play a key role in powering data centers that require massive amounts of electricity to run computers that crunch numbers for artificial intelligence calculations.
With that in mind, here’s a look at seven of the top oil and gas stocks:
| Stock | Focus | Forward Dividend Yield |
| Cheniere Energy Inc. (LNG) | Major U.S. producer benefiting from global natural gas supply disruptions. | 0.9% |
| EQT Corp. (EQT) | Top shale player fueling rising energy demand from AI data centers. | 1.2% |
| Exxon Mobil Corp. (XOM) | Supermajor expanding production in the Permian and Guyana basins. | 2.8% |
| Chevron Corp. (CVX) | Global giant with Berkshire Hathaway backing and South American assets. | 3.8% |
| Occidental Petroleum Corp. (OXY) | Exploration and production firm focused on debt reduction, growing payouts. | 1.9% |
| SLB N.V. (SLB) | Services leader expanding into hydrogen and carbon capture technologies. | 2.3% |
| Tidewater Inc. (TDW) | Offshore vessel operator supporting global oil and gas exploration. | N/A |
Cheniere Energy Inc. (LNG)
Within the natural gas space, a superchilled version of the fuel, or liquefied natural gas, has helped transform the industry into a global market.
That’s because natural gas in its liquid form is much easier and more economical to transport by ship, opening up Asia and Europe to natural gas produced cheaply in the U.S. The U.S. is the biggest natural gas-producing country in the world and has increased in importance as an exporter of LNG, especially as Europe tries to free itself from Russian energy amid the war in Ukraine.
Now, the U.S. conflict with Iran is crimping LNG supply from the Middle East, with damage to infrastructure in major exporter Qatar as well as a shipping snarl in the Strait of Hormuz, a major chokepoint for energy transport.
Cheniere Energy is a key beneficiary of the LNG export trend and has built one of the largest natural gas liquefaction platforms in the world, with facilities in Louisiana and Texas. The company is the biggest LNG producer in the U.S. and the second-biggest operator in the world.
“U.S. LNG players will be benefiting massively due to the LNG price arbitrage as they send shipments to Asia, given Qatar LNG is now offline for a year or more,” says Maleeha Bengali, CEO and portfolio manager of MB Commodities Capital.
EQT Corp. (EQT)
This top U.S. natural gas player, with operations in the Marcellus and Utica shales of the Appalachian Basin, is also benefiting from increased LNG exports to Europe and Asia as well as increased U.S. demand from artificial intelligence data centers and the broader expansion of U.S. power production.
Demand from the data centers that power the computers at the core of artificial intelligence is expected to meaningfully increase overall U.S. electricity demand. Combined with the electrification of many sectors of the economy, including transportation, that demand is expected to boost electricity after years of relatively flat usage.
While nuclear energy will play a part, reactors take a long time to develop and permit. So natural gas is expected to be the bridge fuel between coal and renewables, making the commodity relevant for decades and leaving companies like EQT in strong positions.
Exxon Mobil Corp. (XOM)
Turning to large energy investment staples, this oil and gas supermajor often makes experts’ lists of top picks for oil and gas stocks. Like other Big Oil companies, supermajors are vertically integrated, meaning they own the entire supply chain, from exploring for hydrocarbons and getting oil and gas out of the ground to refine it, to transporting it and selling it to end consumers.
When it comes to the renewable energy transition, Exxon has deep pockets to spend on new technologies. It has dabbled in carbon capture and storage, hydrogen, lower-emission fuels, and lithium, a key mineral for electric vehicle batteries and grid storage.
Still, all of the supermajors remain oil and gas companies at heart, as they try to balance the push for decarbonization with continued demand for their core fossil fuel products.
Exxon has more than doubled its production volume in the key Permian Basin with the acquisition of Pioneer Natural Resources. Located mostly in Texas, with some acreage in New Mexico, the Permian is the highest-producing oil patch in the U.S.
Exxon has also been expanding abroad in Guyana as it develops major oil reserves offshore from the South American nation.
“Exxon has been working very hard to lower its costs and increase cash flow,” says Moe Zulfiqar, founder and analyst at Zulfiqar Research. “If one can be patient, it has potential to be a fruitful investment: higher profits, higher cash flow and ultimately meaning higher dividends. The higher price of oil and gas is nothing but a tailwind for the company.”
[Read: 6 Best Renewable Energy Stocks to Buy]
Chevron Corp. (CVX)
Warren Buffett may be recently retired as CEO of Berkshire Hathaway Inc. (BRK.A, BRK.B), but his legacy as one of the world’s most famous investors is likely to live on and have an outsized influence on where people put their money.
Over the years, the company has amassed substantial holdings of oil and gas companies. As of the end of December, Chevron was Berkshire’s fifth-largest holding by percentage of its portfolio. With a stake in Chevron of more than 6%, Berkshire’s investment represented over 7% of the investment company’s $300 billion portfolio.
Chevron also has major holdings abroad and this week said it has agreed to an asset swap with Venezuelan oil company PDVSA that will expand Chevron’s heavy oil position in two joint ventures. After the U.S. military captured Venezuelan President Nicolás Maduro in January, Chevron appears to be one of the oil and gas companies that could benefit from increased U.S. access to the South American nation, but repairing and developing its oil sector will take decades, no matter which companies are involved.
Occidental Petroleum Corp. (OXY)
Speaking of Warren Buffett, Berkshire Hathaway has also amassed substantial holdings of this oil and gas exploration and production company. That can give regular investors a certain amount of confidence that other oil and gas companies without the backing of the Oracle of Omaha might not generate.
As of the end of December, Occidental was Berkshire’s seventh-largest holding by percentage of its portfolio. With a stake of nearly 27%, Berkshire’s investment in OXY made up more than 4% of the investment company’s portfolio at last report.
In recent years, oil and gas companies have returned more money in the form of dividends and share repurchases to investors who in the past got fed up with overzealous drilling even if it was at diminishing returns during lower-oil-price environments.
OXY has doubled its quarterly per-share dividend over the past four years. However, it has scaled back buybacks as it has focused on reducing debt and retiring higher-cost preferred equity, which involves refinancing higher-dividend shares with lower-interest debt.
SLB N.V. (SLB)
This oilfield services company, formerly known as Schlumberger, is active in more than 100 nations, helping oil and gas companies run their operations. It is involved in drilling, well completion, reservoir mapping and pipelines, along with services and technology to help companies reduce emissions.
The company is also involved in the energy transition, with geothermal, hydrogen, energy storage, lithium and carbon capture operations.
In line with the wider oil and gas industry, it is also returning money to shareholders. The company is aiming for more than $4 billion this year in dividends and share repurchases.
Tidewater Inc. (TDW)
For a smaller play on the energy sector, investors can consider this company that operates vessels that support the global offshore oil and gas exploration and production industry.
The company has also invested in offshore wind services, but not to the extent of some of its competitors. Still, the offshore wind industry in Europe and Asia is much more advanced than in the U.S., and Tidewater’s global presence could provide the company with room to expand.
For now, Tidewater is much more focused on the oil and gas industry. The company says it has the largest offshore support vessel fleet in the industry, and it recently acquired a Brazilian offshore fleet operator.
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7 Best Oil and Gas Stocks to Buy in 2026 originally appeared on usnews.com
Update 04/15/26: This story was previously published at an earlier date and has been updated with new information.
