Since hostilities against Iran began on Feb. 28, energy stocks have proven to be some of the only true winners that bullish investors could count on. That was until a social media post by President Trump sent the price of oil lower, and with it, the price of oil stocks. It was a reminder that when markets are on a knife’s edge, it doesn’t take much to cause big moves.
So it’s worth noting that CEO Mike Wirth says the markets are underpricing supply shocks from Iran’s closing of the Strait of Hormuz. Wirth said the market was trading on “scant information” and “perception.” While it might be more accurate to say that investors are facing a firehose of information, the accuracy of that information is in question.
But that’s why investors shouldn’t dismiss this as an oil executive “talking his book.” Wirth runs an oil major that has had operations in Venezuela for decades. He knows what a disrupted market looks like and how difficult it can be to get back to “normal.”
This means that even if oil prices avoid a worst-case scenario, such as the $200-per-barrel forecast by Citigroup, consumers are likely to face higher prices at the pump for some time. However, if you’ve been on the sidelines for this rally, there’s still time to get involved, and there are different areas of the industry in which to find buying opportunities.
Big Oil Strength: Chevron Leads the Charge in a Tight Supply Market
Starting with Big Oil, Chevron is the first name to consider. CVX stock is up nearly 33% in 2026 and has broken out of a range it was in since 2022.
The surge started following the U.S. military’s operations in Venezuela. That’s because Chevron is the only oil company that has been allowed to do business in the country.
It would be fair to ask whether CVX stock is setting up for a volatile snapback if hostilities in the Strait of Hormuz die down and end in the Middle East. Chevron is trading about 11% above its consensus price target.
However, analysts have been raising those targets, the most bullish of which comes from Piper Sandler. The firm raised its price target for Chevron to $242 from $179.
In the last three years, CVX stock has delivered a total return of around 50%. That may not be that exciting to pure growth investors. However, it does highlight Chevron’s status as a Dividend Aristocrat. For investors who want both growth and value, CVX is a stock that reliably pays shareholders for waiting. Even with the recent surge in price, Chevron still has a dividend yield of 3.5%, or $7.12 per share annually at current prices.
Refining Advantage: Valero Thrives on Volatility and Margin Expansion
If Chevron represents the upstream side of the energy trade, offers something distinctly different: a pure-play refining story that can thrive even when crude prices are volatile. That’s what makes Valero a unique proposition in the current environment.
While most energy stocks rise and fall with the price of oil, refiners like Valero profit from the spread between crude input costs and refined product prices—known as the crack spread. That means a supply disruption that rattles producers can actually widen margins for refiners.
Valero is the largest independent petroleum refiner in the world, with 15 refineries across the United States, Canada, and the United Kingdom. That scale gives it a meaningful competitive moat and the operational flexibility to adapt to shifting crude supply routes. That’s a particularly relevant advantage if disruptions in the Strait of Hormuz force sourcing changes.
VLO stock has climbed by more than 45% in 2026, putting it about 20% above its consensus price target. However, as with Chevron, analysts have been revising targets higher. The stock does look a little extended, but Valero also rewards patient investors with a dividend yield currently near 2%, or $4.80 per share annually at current prices, making it a compelling blend of cyclical upside and income.
Midstream Stability: Enbridge Offers Income and Volume-Driven Growth
Another way to invest in energy’s ongoing rally is via midstream companies operating the pipelines that deliver oil and natural gas to downstream refiners. These companies act like toll booths for the oil and gas industry.
That’s because they collect a fee for moving oil and gas irrespective of the commodity price. The key is volume, not price, and currently volume is extremely high with operations near record levels in early 2026.
That’s why merits strong consideration. The Canada-based company is one of the largest pipeline operators with over 18,000 miles of pipeline that’s responsible for about 30% of the crude oil produced in North America. It’s also responsible for transporting about 20% of the natural gas consumed in the United States.
In the past three years, ENB stock has delivered a total return of around 80%, which is evidence of the consistent performance in these midstream companies. However, the consensus price target of $65 suggests there could still be nearly 20% upside in Enbridge’s stock price. That growth potential is supplemented by a safe dividend that currently yields around 5.1%, or $2.78 per share annually based on current prices.
