Energy Exposure: Oxy vs ET in a Volatile Market

The recent geopolitical conflict in the Middle East has highlighted the world's reliance on oil and natural gas, underscoring their importance to modern society.

While many are shifting towards clean energy sources, oil and gas remain crucial for decades to come. Therefore, a diversified portfolio should include some exposure to these commodities.

Two notable options for energy exposure are Occidental Petroleum (NYSE: OXY) and Energy Transfer (NYSE: ET). However, their businesses are vastly different, with Occidental being an upstream oil and gas producer and Energy Transfer operating as a midstream master limited partnership.

Oxy has operations in the Middle East and Africa but most of its production is U.S.-based. As such, it stands to benefit more from high energy prices than it is affected by them. However, Oxy's financial results are highly dependent on commodity prices, making its stock volatile.