Chevron vs. Enbridge: Which Energy Giant Makes More Money Off the Iran War Oil Price Shock?

Energy investors often weigh the stability of massive producers against the steady income generated by pipeline operators. Deciding between Chevron Corp. (NYSE:CVX) and Enbridge Inc. (NYSE:ENB) requires looking closely at their 2026 outlook.

Chevron is a global powerhouse involved in everything from drilling to refining. Enbridge focuses on the essential midstream infrastructure that moves oil and gas across North America. While both operate in the same broader sector, they offer different risk profiles and growth drivers for you to consider this year.

The case for Chevron

Chevron is a leading integrated energy company that produces crude oil and natural gas while also manufacturing fuels and lubricants. In its latest annual report supplement, the company highlighted a diverse upstream portfolio with significant assets in the United States, Australia, Argentina, and Kazakhstan. In the context of the shift toward renewable energy stocks, Chevron continues to optimize its fossil fuel portfolio while exploring lower-carbon alternatives like renewable natural gas. This integrated approach allows the company to capture value across the entire energy supply chain.

In FY 2025, revenue reached about $184.4 billion, which represented a decrease of roughly 4.6% from the prior year. This dip in top-line results contributed to a net income of approximately $12.3 billion for the fiscal period. While profitability remained substantial, the net margin of 6.7% was a step down from the 9.1% reported in 2024. Despite the revenue decline, the company continues to generate significant earnings from its global operations.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 0.2x. This ratio, which measures total debt against shareholder equity, indicates a very conservative use of debt to fund the business. The current ratio of approximately 1.2x suggests the company can comfortably cover its short-term liabilities with its current assets. Free cash flow, calculated as cash from operations minus capital expenditures, was approximately $16.6 billion for the year.

The case for Enbridge

Enbridge is a leader in North American energy transportation and distribution, operating through four main business segments. As stated in its latest annual report, Enbridge employs over 14,800 regular workers to maintain its vast network of liquids pipelines and gas transmission systems. The company recently expanded its footprint in the United States by acquiring the crude gathering businesses of Salt Creek Midstream and Tallgrass Energy in 2026. These strategic moves strengthen its role as a vital link between energy producers and consumers.

In FY 2025, revenue reached about $46.5 billion, representing a significant increase of approximately 21.9% over the previous year. This growth helped the company achieve a net income of close to $5.3 billion for the period. Its net margin of 11.5% reflects the profitability of its toll-road-style business model, where it earns fees for moving energy regardless of commodity price swings. This expansion in revenue shows the impact of its recent acquisitions and infrastructure projects.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 1.7x. This higher ratio indicates that the company uses more debt relative to its equity to fund capital-intensive pipeline projects. The current ratio of nearly 0.5x shows that current liabilities exceed current assets, which is a common structure for midstream companies with steady, contracted cash flows. Free cash flow for the fiscal year was approximately $2.2 billion, providing capital for its dividend and ongoing projects.

Risk profile comparison

Chevron faces significant risks from the inherent volatility of crude oil and natural gas prices, which directly impact its upstream earnings and the feasibility of new projects. The company must also navigate evolving climate-change laws and potential carbon taxes that could increase operating costs. Furthermore, integrating the massive 2025 acquisition of Hess involves risks related to achieving expected synergies while competing against global rivals like Occidental Petroleum (NYSE:OXY).

Enbridge manages a vast infrastructure network that is vulnerable to operational failures, service interruptions, or damage from severe weather events. The company also faces cybersecurity threats that could target critical digital infrastructure, a risk that is heightened by the integration of artificial intelligence in its operations. Regulatory hurdles and legal challenges to pipeline projects remain a constant pressure as it competes with other midstream giants such as ONEOK (NYSE:OKE) and MPLX (NYSE:MPLX).

Valuation comparison

Chevron currently trades at a lower multiple of its future earnings estimates, while Enbridge appears cheaper when comparing its market price to sales over the past twelve months.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

Which stock would I buy in 2026?

The Iran war has been good business for Chevron. The American oil giant benefits far more greatly from the spike in world oil prices than the Gulf War harms it. That's because Chevron produces most of its oil in the United States, so it collects the higher price for oil that is set worldwide, with little of the higher costs or risks stemming from the Iran war.

In its most recently reported quarter. In Q3 of fiscal 2026, the big oil stalwart saw revenues jump 36% to nearly $67.8 billion, with an even greater percentage leap in net income, from $3.5 billion to $9.5 billion--that higher oil price is going to the bottom line in a big way. Wall Street expects Chevron to tally $242 billion in sales from oil pumping and its gas station business for the full year, with a nearly tripling of net income to $35 billion.

Enbridge, meanwhile, doesn't benefit directly from the spike in oil prices since the Trump administration launched its war on Iran in February. That's because, as a midstream provider, nearly all of its capacity is sold in fixed-rate contracts. That is the downside to the "toll-road" model of a midstream energy business. That said, its expansion of capacity and recent acquisition of Tallgrass have the business set up for a fine 2026. Wall Street sees sales rising 25% to $81.5 billion this year, but with a slump in net income of about $1 billion to $6.1 billion. It is a stable dividend payer with a forward annual dividend rate of 5.9% at today's price, though that is less than Chevron's 7.1%.

The decision about which one of these stocks to buy isn't so clear-cut. A dip in oil prices will take a toll on Chevron's stock. But with no definitive end to the Iran war in sight, it promises to keep oil and gasoline prices elevated due to the curtailment of world supply from the partially closed Strait of Hormuz. That means Chevron will continue to benefit from high prices. With a lower forward P/E ratio and a higher dividend payout, Chevron is the stock to buy.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Enbridge. The Motley Fool recommends Oneok. The Motley Fool has a disclosure policy.