Jasmine Birtles
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The Best Oil Stocks to Buy as a UK Investor in 2026
Ruby Layram
16th Sep 2026
Oil might not be the hottest investing trend on social media right now, but it remains one of the most important sectors in the global economy.
Despite the rise of renewable energy, the world still relies heavily on oil and gas for transportation, manufacturing, aviation and power generation. Meanwhile, geopolitical tensions, supply constraints and rising energy demand have kept oil prices firmly in focus throughout 2026.
For investors, that creates opportunities.
Many oil companies continue to generate enormous cash flows, pay attractive dividends and buy back their own shares. Some analysts even believe the sector could benefit if global oil inventories remain tight in the second half of the year.
So, if you’re looking for the best oil stocks to buy in 2026, here are five names worth watching.
1. Exxon Mobil (XOM)
One of the world’s largest integrated oil majors, Exxon Mobil remains a go-to name for investors wanting stability rather than fireworks.
Its diversified operations span exploration, refining, and chemicals, giving it a buffer against swings in any single part of the oil price cycle. It won’t deliver the eye-catching gains of smaller drillers, but its scale, reliable dividend, and heavy trading volume make it a staple “anchor” holding for many energy portfolios.
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2. Chevron (CVX)
Chevron sits alongside Exxon as the other major “blue-chip” oil pick. Like its rival, it offers broad diversification across upstream and downstream operations, along with a long track record of dividend payments.
For investors who want oil exposure without betting on a single project or region, Chevron’s scale does a lot of the risk-management work for you.
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3. BP (BP.)
For UK investors, BP is one of the heavyweight names on the FTSE 100, and its dividends carry real weight in the index’s overall payout. Alongside its dividend, BP has been running share buybacks, effectively returning cash to shareholders through two channels at once.
It’s a name that moves with oil prices and broader energy policy, so it suits investors comfortable with that cyclicality.
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4. Shell (SHEL)
Shell is BP’s fellow FTSE 100 giant and, together, the two account for a significant chunk of the index’s total dividend payouts.
Shell has leaned into a similar playbook of dividends plus buybacks, making it a core pick for UK investors building an income-focused portfolio with home-market exposure.
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5. Marathon Petroleum (MPC)
Marathon Petroleum has been the standout mover among the mid-to-large cap names, climbing roughly 87% over the past six months.
As a major refiner, its fortunes are tied closely to refining margins rather than just crude prices, which can make it behave differently to the pure exploration-and-production names. That recent run means it’s worth watching for valuation as much as momentum.
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6. Diamondback Energy (FANG)
A focused Permian Basin operator, Diamondback Energy has posted a steadier, less dramatic gain of around 15% over six months.
It’s a name analysts tend to flag for operational efficiency in one of the most productive US shale regions, making it a way to get concentrated exposure to domestic US production.
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7. Permian Resources (PR)
Permian Resources has had a strong run, up around 79% over the past year, comfortably ahead of the wider oil and gas sector. It also carries a notably bullish analyst consensus, with the majority of covering analysts rating it a Strong Buy.
That combination of momentum and analyst support has put it on plenty of watchlists this year.
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8. Talos Energy (TALO)
Talos Energy has climbed more than 35% over six months and scores well on growth and momentum in quantitative rating models. That said, its financial safety metrics are less robust than some peers, which is worth flagging for readers who want to understand the trade-off between growth potential and balance-sheet risk.
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9. Vermilion Energy (VET)
Vermilion Energy tops several oil and gas rankings this year, driven by strong growth and momentum scores.
Historically, stocks with this quality profile have delivered above-average annual returns, though as with any single-stock pick, past performance in a ratings model isn’t a promise of what comes next.
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10. Dorchester Minerals (DMLP)
Dorchester Minerals takes a different approach entirely: rather than operating wells itself, it earns royalty income from producing and non-producing oil and gas interests across hundreds of US counties.
That model keeps operational costs low and delivers strong profit margins, making it a popular pick for income-focused investors who want oil exposure without direct drilling risk.
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Why Oil Stocks Are Back in Focus in 2026
Several major themes are driving interest in oil stocks right now.
Supply Constraints
Many analysts believe global oil inventories are becoming increasingly tight, which could support higher oil prices if demand remains strong.
Geopolitical Tensions
Ongoing tensions in key oil-producing regions continue to create uncertainty around future supply.
Strong Cash Flows
Even with oil prices below their peaks, many major oil companies continue generating billions in free cash flow and returning capital to shareholders through dividends and buybacks.
Attractive Valuations
Compared to many technology stocks, energy companies still trade on relatively modest valuations, which appeals to value-focused investors.
Are Oil Stocks a Good Investment Right Now?
Personally, I think oil stocks still deserve consideration in a diversified portfolio.
No, they probably won’t deliver the explosive growth potential of an AI stock.
But they offer something many investors overlook:
- Cash flow
- Dividends
- Real assets
- Inflation protection
- Exposure to global energy demand
The biggest risk is that oil prices remain volatile. If economic growth slows significantly or energy demand weakens, oil stocks could come under pressure.
That’s why I wouldn’t put all of my money into the sector.
However, for investors looking to add income and diversification to their portfolio, oil stocks remain one of the most interesting sectors to watch in 2026.
Final Thoughts
If I were ranking the best oil stocks for UK investors in 2026, my list would be:
- Shell
- ExxonMobil
- Chevron
- ConocoPhillips
- BP
Each offers a slightly different way to invest in the energy sector, whether you’re looking for dividends, growth, value or stability.
As always, make sure any investment fits your goals, risk tolerance and long-term strategy before investing.
This article is for informational purposes only and does not constitute financial advice. Investments can go down as well as up, and you may get back less than you invest.
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