Energy Exposure: Choosing Between Oxy and ET Amid Middle East Conflict

The Middle East conflict has highlighted the world's reliance on oil and natural gas, emphasizing the importance of energy exposure in a diversified portfolio. Occidental Petroleum (NYSE: OXY) is an upstream energy company with operations in the Middle East and Africa, while Energy Transfer (NYSE: ET) is a midstream business that helps move oil and natural gas around the world.

Occidental Petroleum has operations in the Middle East and Africa but most of its production and sales are U.S.-based. This means it stands to benefit from high prices resulting from the conflict, rather than being negatively affected by it. However, the company's financial results are volatile due to commodity price fluctuations.

Energy Transfer is a midstream master limited partnership (MLP) that owns energy infrastructure assets across North America and charges energy companies fees for using its assets to move oil and natural gas. Its success depends on strong demand rather than commodity prices, making it a slow-growing business with a 6.5% yield.

While Energy Transfer and Occidental Petroleum are just two options, investors can also consider other energy giants like Enbridge (NYSE: ENB), Enterprise Products Partners (NYSE: EPD), ExxonMobil (NYSE: XOM), and Chevron (NYSE: CVX). Each of these companies has a different profile, with some offering more growth potential or higher yields.