Top Oil and Gas Stocks to Buy in 2026 Amid Iran-US Conflict

Tradingkey - The Iran-US conflict has disrupted global oil and gas production by interrupting supply chains and damaging oil supply lines and pipeline infrastructures due to ongoing hostilities.

According to the Energy Information Administration, in April, Iraq, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain together enacted a crude oil production cut of 10.5 million barrels per day. The Energy Information Administration’s outlook suggests that the Strait of Hormuz will remain frozen until at least late May, with shipping resuming in June. However, the Energy Information Administration does not expect any regional production back to pre-conflict levels until 2026. Furthermore, the UAE formally withdrew from OPEC as of May 1st, which cuts expected spare capacity for OPEC by 3.8 million barrels per day to 2.5 million barrels per day—eliminating one additional layer of overall protection from global supply shocks.

ExxonMobil also issued a supply-side warning: oil inventories will fall to historic lows in the coming weeks, forcing oil prices to surge and dampening demand.Exxon Senior Vice President Neil Chapman stated that Brent crude spot prices will surge to $150 to $160 per barrel when inventories hit historic lows in the coming weeks.

Even if the Israel-Hamas conflict ended today, Amin Nasser, the CEO of Saudi Aramco, estimates that the current conflict will cost the global market 1 billion barrels of oil, and the global oil and gas markets are not expected to return to normalcy until 2027. The damage to energy infrastructure in the region will take many years to repair, leading to low supplies and high volatility for the foreseeable future.

Why Energy Stocks Deserve Portfolio Space

Investors should take advantage of volatile conditions that offer good prospects for investors to realize higher returns; however investors should focus more on allowing their portfolios exposure to companies that can maintain market share in their respective industries and will continue providing dividends and/or repurchasing shares through economic downturns. The value provided from the energy sector will complement an investor's focus on tech or consumer-based investments as there are multiple segments in the energy value chain that perform differently throughout the economic cycle.

Standout Companies by Segment

Upstream Producers: Benefiting from Supply Deficits

Occidental Petroleum (OXY) is a strong investment choice due to both a significant 26.64% investment from Berkshire Hathaway and the fact that OXY has relatively low production costs in the Permian Basin compared to other oil companies. Additionally, the fact that Warren Buffett and his successor, Greg Abel, are owning OXY shows a high level of confidence and establishment that there will be long-term energy supply shortages.

ConocoPhillips (COP) also has very strong investment attributes with average production costs of $40 per barrel and a highly rated credit rating, which allows them to return most of their free cash flow to investors.

EOG Resources (EOG) is referred to as the "Apple of Oil," in that they use cutting-edge technology as a pure-play shale producer, which results in producing industry-leading margins.

Integrated Majors: Stability and Scale

Berkshire Hathaway has Chevron (CVX) as a core holding that operates across the globe through the entire value chain. This company has opportunities due to the U.S. increasingly gaining access to heavy Venezuelan oil, as well as its recent acquisition of Hess Corp to expand its growth opportunities.According to Berkshire Hathaway's latest 13F filing with the U.S. Securities and Exchange Commission (SEC), as of the end of the first quarter of 2026, Berkshire held approximately $15.4 billion worth of Chevron stock, which remains an important part of its investment portfolio.

ExxonMobil (XOM), which is currently the largest, integrated oil company globally, has reduced production costs significantly in the past several years, and as a result, has created significant amounts of cash flow to protect a 10-year dividend growth streak.

Midstream and LNG: Steady Cash Flow and Global Demand

Of all the companies on the list, Enbridge (ENB) has the highest dividend yield (with a strong base of fee-based revenue from transporting 30% of North America's oil through its North American pipeline system). Cheniere Energy (LNG), the largest exporter of liquefied natural gas (LNG) out of the U.S. and the second-largest operator of LNG in the world, is benefiting from heightened European and Asian demand for LNG due to Middle Eastern LNG disruptions resulting from the Iran conflict.

Key Investment Considerations

The cyclicality and sensitivity of oil to geopolitical shocks tend to affect the industry. Investors seeking to make a profit must look for companies exhibiting three critical traits: a sound balance sheet with reasonable levels of debt, having low operating expenses, and being either geographically or operationally diversified. The fact that tensions in Iraq have helped drive short-term energy prices higher indicates that energy stocks are always a good investment as long as they form part of a well-balanced portfolio to limit downside risk.