Oil Giants Poised for Growth as Prices Remain High

Oil prices have surged above $100 per barrel due to the ongoing Iran war, and this trend is expected to continue. Companies that can capitalize on high oil prices will see significant benefits. Two such companies are Occidental Petroleum (OXY) and Chevron (CVX), both of which could be great investments if you think oil prices will remain high.

Occidental Petroleum generates most of its revenue from upstream exploration, drilling, and extraction. The company's focus on upstream operations makes it a more attractive play on rising oil prices compared to its peers. Its corporate breakeven price for WTI crude oil is $40 per barrel, and analysts expect its adjusted EPS to surge 175% by 2026.

Chevron, one of the world's largest integrated energy giants, has upstream, midstream, and downstream businesses across 180 countries. While it gets most of its oil from the U.S., Kazakhstan, and Australia, it also operates in other regions like Guyana. Chevron's scale and diversification have enabled it to raise its dividend annually for 39 consecutive years.

Both companies are well-positioned to benefit from high oil prices, with Occidental needing WTI crude oil to remain above $40 per barrel to support its capex and dividends, and Chevron requiring Brent crude to stay above $50 per barrel to cover its expenses through 2030. Both companies have a history of annual dividend increases and are expected to see significant growth in their adjusted EPS over the next few years.