If Middle East Wars Worry You, Consider Oil Stocks - ExxonMobil, Chevron, Occidental

Recently, I was deeply shocked by Iran's airstrikes on Israel. How did you feel about it?
If you're worried about wars in the Middle East, now might be the time to look into oil stocks.

Oil stocks are one of the best investments for high dividends, inflation protection, and hedging against Middle East risks.
ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), and Occidental (NYSE:OXY), listed in the US market, are some of the largest oil companies globally. They play a critical role in international oil prices, dividend policies, and business expansion.

In this article, we will deeply analyze why now is the right time to invest in oil stocks, the stock price trends, dividend characteristics, and financial performance of these companies.

Why Should You Pay Attention to Oil Stocks Now?

Investing in oil stocks is garnering attention for several key reasons at this moment. Particularly, the interplay of international geopolitics and economic factors increases the likelihood of rising oil prices. The Iran-Israel conflict, global interest rate decline trends, and OPEC+ production cuts are among the diverse factors influencing oil prices, making oil stocks an essential investment asset in such scenarios.

Oil Pumping Ship - Oil remains the world's number one energy source

💡 The Iran-Israel War and Middle East Tensions

In October 2024, tensions between Iran and Israel escalated dramatically. Iran launched a large-scale missile attack on Israel, and Israel retaliated with airstrikes against Iran and its allied forces. This conflict has the potential to extend beyond a bilateral dispute and spread across the Middle East.
Iran supports various armed groups like Hezbollah, Hamas, and Yemen’s Houthi rebels—referred to as the "Axis of Resistance"—to pressure Israel, affecting the entire region. Source: Chatham House

The US, concerned about the conflict’s escalation, has deployed military forces, including aircraft carriers, to the Eastern Mediterranean and is considering additional airstrikes. If this war expands to regions like Lebanon, Syria, or Yemen, it could severely disrupt global oil supply chains. As this area is a key region for global crude oil supply, oil prices could surge significantly. Experts widely believe that these geopolitical crises could push oil prices higher.

💡 Global Interest Rate Declines and Dollar Value Fluctuations

As interest rates decline globally, including in the US, significant changes are expected in the movements of the dollar and international oil prices. Since crude oil is traded globally in dollars, a weaker dollar tends to push oil prices higher.
In recent years, high interest rates have slowed economic growth, but with the start of rate cuts, demand for crude oil could increase. This provides an environment for oil prices to rise again alongside global economic recovery.

Analysis of Three Major U.S. Oil Companies

1. ExxonMobil (Ticker: XOM) - The Largest Oil Company in the World

1-1. Business Overview

ExxonMobil is one of the largest energy companies globally, focusing on oil and gas exploration, refining, chemical production, and low-carbon energy transition.
Its key assets include the Permian Basin in the U.S., Guyana offshore oil fields, and accelerated shale gas production through the recent Pioneer shale gas merger.
ExxonMobil is also actively advancing low-carbon energy transitions, with innovative projects in carbon capture technology, hydrogen production, and renewable energy.

ExxonMobil is a major beneficiary of rising global oil prices. Its business composition is as follows:

• Oil/Gas Production: 60%
• Chemicals: 20%
• Low-Carbon Technology and Renewable Energy: 10%

1-2. Revenue, Operating Income, Net Income, and Stock Performance

Here is a summary of ExxonMobil’s financial data over the past five years:

• Revenue and net income dropped during the 2020 pandemic but rebounded with rising oil prices in 2021.
• In 2022, international oil price increases further boosted its performance, maintaining steady stock price growth.
  Source: Seeking Alpha
  Source: Stock Analysis.

1-3. Recent News

1. ExxonMobil’s Carbon Capture Projects: The company is pursuing the world’s largest carbon capture project. It aims to capture over 98% of carbon dioxide emissions during hydrogen and ammonia production to achieve carbon neutrality. This project is considered a pivotal case for transitioning to a low-carbon economy.
   Source: Exxon Investor Presentation.

2. Investment in Lithium Production: ExxonMobil has entered the lithium production market, expanding into the electric vehicle battery industry. The company partnered with SK On to secure lithium supplies for EV battery production in the U.S., signaling a strategic shift from its traditional energy company image.
   Source: Seeking Alpha.

1-4. ExxonMobil’s 2024 Dividend Performance Analysis

ExxonMobil pays quarterly dividends. The current stock price is $115.27. With rising international oil prices and global economic recovery, consistent dividend payments are expected in 2024.

1-5. ExxonMobil’s Dividend Analysis Over the Past 5 Years

💡 View ExxonMobil’s Investor Presentation: Exxon Mobil Investor Presentation

#ExxonMobil #DividendAristocrat #LowCarbonEnergy #LithiumInvestment #PoliticalConflict

2. Chevron - The Second Largest Oil Company in the U.S.

Chevron is the second-largest oil company in the U.S., operating a vast portfolio of global assets. It is particularly notable for its active investments in transitioning to low-carbon energy, including renewable energy, hydrogen, and carbon capture technologies.

2-1. Business Overview

Chevron is a leading multinational energy company in the U.S., primarily focusing on oil and natural gas exploration and production. The company has achieved record production levels in the Permian Basin and has further strengthened its global energy assets through the recent Hess acquisition. Chevron’s operations are divided into Upstream (exploration and production) and Downstream (refining and chemicals). Upstream handles crude oil and natural gas production, while Downstream focuses on refining and chemical production.
Source: Chevron

Chevron’s business composition:

• Oil/Gas Production: 65%
• Low-Carbon Energy and Technology: 15%
• Chemicals and Others: 10%

2-2. Revenue, Operating Income, Net Income, and Stock Performance

Here is Chevron’s financial performance over the past five years:

• During the 2020 pandemic, revenue and net income decreased significantly but rebounded sharply with oil price recovery in 2021.
• In 2022, international oil price increases further boosted Chevron’s revenue and net income, solidifying its position in the global energy market.
  Source: Seeking Alpha

2-3. Recent News

1. Chevron’s Hurricane Response: Chevron donated $250,000 to support recovery efforts in areas affected by Hurricane Helene in 2024, showcasing its commitment to sustainability and community collaboration.
   Source: Chevron

2. Chevron’s CCS (Carbon Capture and Storage) Project: Chevron is implementing carbon capture technology (CCS) off the coast of Australia to reduce carbon emissions. This technology captures and stores greenhouse gases, positioning Chevron as a leader in transitioning to a low-carbon economy.
   Source: Chevron

2-4. Chevron’s 2024 Dividend Performance Analysis

Chevron pays quarterly dividends. The current stock price is $150.74. In 2024, consistent dividend payments are expected due to rising oil prices and global economic recovery.

2-5. Chevron’s Dividend Analysis Over the Past 5 Years

💡 View Chevron’s Investor Presentation: Chevron Investor Presentation

#Chevron #DividendAristocrat #LowCarbonEnergy #HurricaneSupport #EnvironmentalDebate

3. Occidental Petroleum - A Leader in the Shale Revolution

Occidental Petroleum stands out in the shale revolution, with a significant share of shale gas production in the U.S. Over recent years, its growth has been bolstered by the expanding shale gas market.

3-1. Business Overview

Occidental Petroleum (OXY) is a U.S.-based energy company specializing in oil and gas production. Its key operations include assets in the Permian Basin, DJ Basin, and offshore fields in the Gulf of Mexico, along with significant holdings in the Middle East and North Africa. Additionally, through its subsidiaries, OxyChem and Oxy Low Carbon Ventures, Occidental manages chemical products and low-carbon technologies, emerging as a comprehensive energy company integrating traditional and sustainable energy.

Occidental’s Business Breakdown:

• Shale Gas and Oil Production: 70%
• Low-Carbon Technology and Renewable Energy: 10%
• Chemicals and Others: 20%

3-2. Revenue, Operating Income, Net Income, and Stock Performance

Below is Occidental’s financial performance over the past five years:

• During the 2020 pandemic, revenue and net income declined sharply but rebounded with rising oil prices in 2021.
• Higher international oil prices in 2022 significantly boosted Occidental’s performance, sustaining steady growth.
  Source: Seeking Alpha
  Source: Stock Analysis

3-3. Recent News

1. Warren Buffett’s Investment in Occidental: Renowned investor Warren Buffett’s Berkshire Hathaway recently acquired a large stake in Occidental. Buffett cited the company’s undervalued energy assets and attractive dividend policy as key factors, making Occidental a standout choice among investors.
   Source: MarketBeat

2. Expansion in Low-Carbon Technology: Occidental is leading the development of the world’s largest Carbon Capture and Storage (CCS) project, championing the transition to a low-carbon economy. Its subsidiary, Oxy Low Carbon Ventures, has made substantial investments in clean technology, drawing global attention to its initiatives.
   Source: Occidental
   Source: Seeking Alpha

3-4. Occidental Petroleum’s 2024 Dividend Performance Analysis

Occidental Petroleum pays quarterly dividends. The current stock price is $62.15. In 2024, steady dividends are expected, supported by rising oil prices and solid company performance.

3-5. Occidental’s Dividend Analysis Over the Past 5 Years

💡 View Occidental Petroleum’s Investor Presentation: Occidental Investor Presentation

#Occidental #DividendAristocrat #CarbonCapture #WarrenBuffettHolding

Conclusion

ExxonMobil, Chevron, and Occidental are all attractive high-dividend stocks offering stable income and capital gains driven by rising oil prices.

• ExxonMobil provides stable dividends and strong protection against oil price volatility.
• Chevron showcases potential for long-term growth through its low-carbon energy transition.
• Occidental excels in the shale gas sector, with promising growth prospects.

#ExxonMobil #Chevron #Occidental #OilStocks #WTI #GlobalOilPrices #DividendInvestment