Don't Expect Oil Prices to Drop Until 2027. Here Are 2 Stocks to Buy for This Exact Scenario.

1 hour ago 2

Reuben Gregg Brewer, The Motley Fool

Sat, May 23, 2026 astatine 1:35 PM CDT 3 min read

Darren Woods is the CEO of ExxonMobil (NYSE: XOM), 1 of the world's largest vigor companies. When helium talks, investors listen. Right now, Woods is informing that the marketplace isn't afloat recognizing the proviso disruption from the geopolitical struggle successful the Middle East. And adjacent aft the struggle ends, it could instrumentality a precise agelong clip for vigor markets to get backmost to normal. If you deliberation vigor prices volition stay elevated until 2027, you whitethorn privation to bargain Devon Energy (NYSE: DVN) and Diamondback Energy (NASDAQ: FANG). Here's why.

Devon and Diamondback are leveraged to lipid prices

The archetypal crushed to bargain Devon and Diamondback if you expect oil prices to stay elevated, oregon adjacent emergence further, is that they are upstream-focused businesses. That means that they are focused connected producing lipid and earthy gas. High vigor prices are a immense payment to their top- and bottom-lines.

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A idiosyncratic successful protective cogwheel lasting successful beforehand of vigor infrastructure.

Devon Energy precocious explained however important vigor prices are to its business. With West Texas Intermediate (WTI) crude (the cardinal U.S. vigor benchmark) astatine $90 a barrel, Devon's escaped currency travel output is projected to beryllium astir 15%. If WTI rises to $100, the escaped currency travel output increases to 18%. And if WTI hits $110, the escaped currency travel output rises to 21%. A 22% summation successful lipid prices improves Devon's escaped currency travel output by 40%. That's huge.

While Diamondback Energy didn't supply the aforesaid level of detail, it did enactment that $90 WTI should supply it with a escaped currency travel output of 15%. It volition payment successful the aforesaid mode directionally from rising prices. If you are constructive connected lipid prices, these 2 upstream vigor companies could beryllium precisely what you are looking for.

Devon and Diamondback: Location, location, determination

That said, the existent crushed to similar these 2 companies is that they are some based successful the United States. The geopolitical struggle successful the Middle East doesn't interaction their production. Which means investors tin payment from higher lipid and earthy state prices without immoderate of the geopolitical uncertainty.

There's different imaginable metallic lining here, however. If the struggle successful the Middle East prompts countries to reassess vigor security, request whitethorn permanently summation successful economically and politically unchangeable regions, specified arsenic the United States. That could supply a semipermanent catalyst for some Devon and Diamondback, lasting good beyond the existent manufacture upheaval.

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