Chevron Takes Top Spot Amid Oil Stock Surge

The first half of 2026 has seen significant gains for oil stocks, particularly ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and Occidental Petroleum (NYSE: OXY). The disruption in traffic through the Strait of Hormuz due to the Iran war has led to a shortage in oil supply, causing fuel prices to rise.

Among these three stocks, Occidental Petroleum has delivered the most impressive performance so far this year. This is mainly due to its greater sensitivity to crude oil prices, resulting from its upstream focus. ExxonMobil and Chevron have also performed well, but with less impressive gains than Occidental.

The valuation of these stocks does not seem to be affected by their exceptional returns. ExxonMobil has the highest price-to-earnings ratio at 14.3 times forward earnings, followed by Chevron at 13.6. Occidental's forward earnings multiple is significantly lower at 10.5.

Despite its low valuation, Occidental is considered a riskier investment due to its heavy upstream focus. If oil prices fall in the second half of the year, Occidental's stock would be most affected among the three. For this reason, it ranks third in the author's selection for the second half.

The top spot goes to Chevron, which has been outperforming its peers on various fronts. In recent years, Chevron has delivered the highest growth in cash flow from operations and the highest production compound annual growth rate. Its acquisition of Hess has transformed its production capacity and provided significant exposure to one of the world's highest-return areas - Guyana.

Chevron's management expects to grow earnings per share and adjusted free cash flow by more than 10% per year. The company plans to continue buying back shares annually, paying dividends at the current level, and funding capital projects even if oil prices fall below $50 per barrel.