Prediction-Oil Will Stay Above $90 Through 2026 and These 2 Stocks Will Profit Most

ExxonMobil (NYSE: XOM) and Devon Energy (NYSE: DVN) are positioned to generate substantially higher free cash flow through year-end 2026. Analysts tracking the Hormuz disruption are forecasting WTI to remain at elevated levels through the year. Barclays sees $85 a barrel, Goldman bumped theirs to $71, and Macquarie Group has even called for $150.

Given that Iran's Islamic Revolutionary Guard Corps has vowed no oil will pass through the Strait of Hormuz, a waterway that handles approximately 20% of global oil supply, it seems completely possible that $90+ oil is here to stay through 2026.

As of today, oil sits at $99 a barrel, with no sign the IRGC is going to let up regarding Hormuz. It is their greatest global leverage, and likely one of the areas they will fight to control the most.

If this 'higher for longer' scenario occurs, both ExxonMobil and Devon Energy are going to do very well for investors, and that's exactly what looks to be playing out.

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Not as temporary as we'd hope

This is not a spike that reverses in two weeks. Three structural forces keep oil elevated. First, a Hormuz closure is not a pipeline outage that gets patched in days. Commercial shipping and insurance markets are withdrawing from the region, which means even partial reopening takes months to normalize tanker routing and premiums.

Second, Strategic Petroleum Reserve capacity is limited, constraining the policy response that blunted prior spikes.

Third, the price was already recovering sharply before the Hormuz escalation: Brent had climbed from $62.18 on Jan. 2 to $85.28 by March 6, a $23.10 move in nine weeks driven by tightening fundamentals, not headlines.

ExxonMobil: The higher-oil leveraged machine

Exxon is trading at $156.12, already up 30% year-to-date. The earnings engine behind that move is real. Full-year 2025 free cash flow came in at $23.6 billion at an average crude price well below $90.

The company produced a record 4.7 million oil-equivalent barrels per day in 2025, with advantaged assets, Permian, Guyana, and LNG, representing 59% of output. Golden Pass LNG first cargoes are expected in Q1 2026, adding a new high-margin revenue stream at exactly the right moment. The dividend stands at $1.03 per share quarterly, the 43rd consecutive year of growth. At the current price, the yield is 2.64%.

Devon Energy: Merger catalyst plus oil tailwind

DVN trades at $46.25, up 30% year-to-date, and sits at an 11x trailing P/E with a $51.50 analyst consensus price target.

The Q2 2026 close of the Coterra merger is the near-term catalyst: Devon shareholders retain roughly 54% of the combined entity, the deal targets $1 billion in annual pre-tax synergies, and the post-merger dividend is expected to jump 31% to $0.315 per share quarterly. Devon's stand-alone 2025 free cash flow was $3.12 billion, up 465% year-over-year, achieved while oil averaged well below $90.

If oil retreats below $90 and holds there, both stocks face earnings pressure and that scenario would not materialize. But with Hormuz disruption structurally restricting tanker flow, SPR capacity constrained, and two operators already generating record cash at lower prices, both companies enter the second half of 2026 with meaningful earnings tailwinds if oil remains elevated.

Austin Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.