SA asks: Which oil stocks are top picks today?

Which oil stocks are currently the most appealing for investors following the U.S. acquisition of Venezuela?

Seeking Alpha analysts Deep Value Investing, Fluidsdoc, and Daniel Jones gave us their picks.

Deep Value InvestingLet’s provide some background. The general agreement is that 2026 will be a year of excess supply, with an oil surplus potentially reaching 3.84 million barrels per day. Western Texas Intermediate, also known as WTI, fell by about 20% last year, and the Energy Information Administration predicts the WTI will average $51 per barrel.

With the recent changes in Venezuela, particularly following the $2B oil agreement, which appears to be only the initial portion, and the U.S. taking control of “shadow-fleet” tankers bound for Russia, China, or Cuba, I anticipate one stock will gain, even amid the oil surplus: Chevron (CVX). 

The basics are not connected to the bullish scenario. In fact, my model indicates a peak of $1.3B in extra operating cash flow from Venezuela within the next 12 months. When compared to the $31.9B in TTM operating cash flow, it becomes clear how insignificant Venezuela is when looking at fundamentals.

In my opinion, the potential for growth is solely based on sentiment. I think any favorable development in Venezuela that benefits the U.S. will act as a positive factor for Chevron.CVX), as they are the sole significant American oil company active in the region. Additionally, Chevron is involved in the AI sector through its collaborations with Engine No. 1 and GE Vernova (GEV) to reach a capacity of 4 GW by the conclusion of 2027.

Regarding U.S. Gulf Coast refineries, I think the majority of the potential gains will go to Valero (VLO) and Phillips 66 (PSX) if the $2B agreement ends up being just the initial portion of numerous upcoming orders.

FluidsdocOne aspect of increasing Venezuelan heavy crude production is the need for diluents. U.S. shale producers may have an advantage in this area, as much of the shale oil has a gravity exceeding 50 (commonly referred to as condensate).

Gas extractors have been focusing on wells with high gas potential; when cooled, the gas transforms into natural gas liquids like ethane, propane, butane, and pentane. Undervalued companies I favor for this chance are Devon Energy (DVN) (Anadarko, Delaware, Eagle Ford), APA (APA) (Alpine High, Delaware), and SM Energy (SM) (Maverick Basin). These firms have been actively exploring land referred to above that is favorable for producing these liquids and possess additional capacity to increase output in response to higher demand from Venezuela.

I also enjoy the offshore drilling companies, especially Noble (NE) and Transocean (RIG). I believe both are undervalued in a situation where their top assets are almost sold off with utilization reaching 90% and rig rental prices are rising. Investors who exercise some patience may enjoy significant returns as rig availability becomes more constrained.

Daniel Jones: Currently, the oil sector finds itself in a compelling position. Alongside larger geopolitical issues, there are specific market and other factors that are generating significant uncertainty. This encompasses ongoing expansion in the U.S. oil production sector, as well as the possibility of reduced global demand due to China’s economic slowdown and the U.S. approaching a recession.

I’m not particularly optimistic about any company that derives most of its revenue or profits from oil. However, there are a few companies in this group that still look attractive.

If your objective isn’t strictly focused on the oil industry, then the top position on the list unquestionably goes to Energy Transfer (ET, a midstream/pipeline company that operates more than 140,000 miles of pipeline along with a range of other significant energy infrastructure assets.

The company has been strongly promoting natural gas, largely due to the excitement around AI and data centers, which are expected to drive major investments in electricity generation. Nevertheless, the firm operates 17,950 miles of crude oil main and collection pipelines and has a capacity of 1 million barrels per day for transporting crude oil from the Permian Basin.

In the first nine months of its 2025 fiscal year, Energy Transfer (ET) generated $2.2 billion in EBITDA, which is roughly 18.7% of its total profit, primarily from its Crude Oil Transportation and Services division. However, this does not account for other segments that also benefit from the oil industry. This is a company I personally hold shares in; it’s my second biggest individual investment. Naturally, I have it rated as a “strong buy.”

If your objective is more aligned with an integrated energy strategy, then perhaps the leading company currently is Exxon Mobil (XOM). In December, I reconfirmed the company as a “buy” option. Although Exxon stock wasn’t as inexpensive as I preferred, I still considered it an attractive opportunity.

As outlined in a prior article, Exxon anticipates producing between $135B and $245B in additional cash flow—cash flow beyond what is needed for capital spending and its current dividend—between 2026 and 2030. This could result in significant additional value. Specifically, I estimated an annualized potential gain of approximately 15%.

Another intriguing possibility worth exploring is Chord Energy (CHRD, an oil and gas exploration and production company with properties in the Williston and Marcellus areas. Approximately 93.8% of its income is derived from oil, and leadership has recently been investing in promising opportunities within the sector. The company aims for a 4% rise in oil output this year while reducing expenditures by $100 million through operational improvements it is implementing.

• Top Oil and Gas Drilling and Extraction Stocks
• Top Integrated Oil and Gas Companies
• Top Oil and Gas Drilling Companies
• Top Oil and Gas Refining and Sales Stocks