Oil is on everyone's radar. Chevron deserves to be too.
From Venezuela to Iran, 2026 has been the year of oil upheaval, and that certainly helped energy stocks pop. The SPDR S&P Oil & Gas Exploration & Production ETF is the S&P 500's best performing major sector this year, and Chevron is up more than 40% since Barron's highlighted it in April 2025.
Some investors may be happy to lock in those gains given how difficult it has been to invest in energy in recent years. Fair enough. For those who do still want exposure to that area however, Chevron looks like a good bet.
"Amidst headline-driven energy market volatility, we think Chevron represents compelling investment merit," says Ben Cook, a portfolio manager for two of Hennessy's energy funds. His reasoning is threefold: Attractive growth in its upstream portfolio, operational momentum in its refining business, and its attractive capital allocation program.
The company has attractive upstream properties -- from South America to the Mediterranean -- that it forecasts will generate between 7% to 10% compound annual growth through the end of the decade. "With elevated geopolitical risk premiums to remain even after conflict resolution in the Middle East, Chevron should benefit from strong commodity pricing across the...spectrum which should complement upstream volume growth to drive attractive revenue over the next several years," says Cook.
While Venezuela is still a question mark, Chevron has been in the region for years, which could give it an advantage once the nation begins to open up more broadly to foreign investment. And its downstream assets are attractive too, with Chevron's refining business recently recording its highest crude throughput volume (i.e. the actual amount of oil that enters a facility) level ever, while supply shortages are keeping refining margins high.
The global energy landscape is shifting rapidly, upended by an end to predictable market access and a largely stable geopolitical backdrop that had dominated for much of the last decade. In this new normal, Melius Research analyst James West argues that supermajors like Chevron are best positioned to take advantage, as they can quickly ramp up exploration, bolstered by strong balance sheets.
That much is evident by the fact that Chevron is continuing to grow its dividend and repurchase shares, the latter to tune of $10 billion to $20 billion, according to company targets.
The technical setup looks strong too, according to Barron's Doug Busch.
"While recent market volatility has been dizzying, solid operational performance and continued dedication to shareholders makes Chevron a dependable steward of energy investment capital," says Cook. "We think the price move off of conflict highs represents attractive entry opportunity and we would be buying additional shares."
At a recent $195, at least those shares are only slightly more expensive than filling up your tank.
Comments