What are the most attractive oil stocks right now for investors in the wake of the U.S. takeover of Venezuela?
Seeking Alpha analysts Deep Value Investing, Fluidsdoc, and Daniel Jones gave us their picks.
Deep Value Investing: Let’s put things into context. The consensus out there is that 2026 will be a glut year, with an oil oversupply that could reach 3.84M barrels a day. Western Texas Intermediate, or WTI, was down roughly 20% last year, and the Energy Information Administration expects the WTI to average $51/bbl.
Given the latest developments in Venezuela, especially after the $2B oil deal, which seems to be just the first tranche, and the U.S. seizure of “shadow-fleet” tankers heading towards Russia, China, or Cuba, I expect one equity to benefit, despite the oil glut: Chevron (CVX).
Fundamentals have nothing to do with the bull case. In fact, my model shows a ceiling of $1.3B in additional operating cash flow from Venezuela over the next 12 months. Compare that with the $31.9B in TTM operating cash flow, and you quickly realize how irrelevant Venezuela is from a fundamentals perspective.
It is my view that the upside is exclusively from a sentiment perspective. I believe any positive development in Venezuela that favors the U.S. will be a tailwind for Chevron (CVX), as they are the only major American oil company operating in the area. On top of that, Chevron has exposure to the AI trade via its partnerships with Engine No. 1 and GE Vernova (GEV) to build up to 4 GW of power by the end of 2027.
In terms of U.S. Gulf Coast refineries, I believe most of the upside will be taken by Valero (VLO) and Phillips 66 (PSX) if the $2B deal turns out to be just the first tranche of many future orders.
Fluidsdoc: One side of expanding Venezuelan heavy crude output is the diluent requirement. U.S. shale producers could be advantaged here, as a lot of shale oil is above 50 gravity (often called condensate).
Gas drillers have been targeting wells with rich gas potential; when chilled, the gas becomes natural gas liquids such as ethane, propane, butane, and pentane. Undervalued companies I like for this opportunity are Devon Energy (DVN) (Anadarko, Delaware, Eagle Ford), APA (APA) (Alpine High, Delaware), and SM Energy (SM) (Maverick Basin). These companies have been aggressively developing acreage mentioned above that favors production of these liquids and have excess capacity to ramp up to meet increased demand from Venezuela.
I also like the offshore drillers, particularly Noble (NE) and Transocean (RIG). I think both are undervalued in a case where their best assets are nearly sold out with utilization at 90% and rig rental rates are increasing. Investors with a little patience could reap rich rewards as rig availability tightens.
Daniel Jones: Right now, the oil industry is in an interesting spot. In addition to broader geopolitical turmoil, there are certain market and other forces that are creating a great deal of uncertainty. This includes continued growth in the oil production space in the U.S., as well as the prospect of weaker global demand as China’s economy slows down and the U.S. nears a recession.
I am not overly bullish on any company that generates most of its revenue or profitability from oil. But there are some players in here that are appealing nonetheless.
If your goal is not necessarily a pure play in the oil space, then the top spot on the list definitely belongs to Energy Transfer (ET), a midstream/pipeline operator with over 140K miles of pipeline and a collection of other valuable energy infrastructure assets.
Management has been especially pushing natural gas, thanks in large part to the hype associated with AI and data centers and the promise that they will necessitate significant investments in electricity production moving forward. However, the company has 17,950 miles of crude oil trunk and gathering lines and boasts 1M barrels per day of Permian Basin crude oil takeaway capacity.
In the first nine months of its 2025 fiscal year, Energy Transfer (ET) generated $2.2B worth of EBITDA, or approximately 18.7% of all of its profitability, specifically from its Crude Oil Transportation and Services segment. But this doesn’t include other segments that also derive value from the oil space. This is a company that I personally own shares of; it’s my second largest individual holding. Naturally, I have it rated a “strong buy”.
If your goal is more along the lines of an integrated energy play, then perhaps the best player out there now is Exxon Mobil (XOM). Back in December, I reaffirmed the company as a “buy” candidate. Even though Exxon stock was not as cheap as I would have liked, I viewed it as a compelling opportunity.
As I detailed in a previous article, Exxon expects to generate somewhere between $135B and $245B of surplus cash flow, which is cash flow in excess of capital expenditures and its existing dividend, from 2026 through 2030. And this should leave some nice upside. In fact, I projected an annualized upside of around 15%.
Another interesting prospect worth considering is Chord Energy (CHRD), an oil and gas exploration and production business with assets in the Williston and Marcellus regions. Around 93.8% of its revenue comes from oil specifically, and management has lately been making some interesting investments in the space. Management is targeting a 4% increase in oil production this year and doing so with $100 million less spending because of operational changes it is making.