The Stock Prices of These 3 Oil Giants Are Up Roughly 30% in 2026. But Are They a Buy?

Crude oil prices have skyrocketed this year. WTI, the primary U.S. oil price benchmark, has soared 70%, rising from under $60 at the beginning of the year to around $95 per barrel. Meanwhile, Brent, the global oil benchmark, is also up about 70% this year, jumping from $60 a barrel to more than $100.

The rally in crude prices has driven up most oil stocks. The shares of oil giants ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and ConocoPhillips (NYSE: COP) are all up roughly 30% on the year. Here's a look at whether you should still buy these top oil stocks.

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The current expectations for oil prices

While shares of Exxon, Chevron, and ConocoPhillips have surged this year, they haven't risen as much as crude oil prices. That's due to the market's belief that the current high oil prices won't last long. The main factor fueling oil's rise is the war with Iran, which has significantly disrupted the flow of oil out of the Persian Gulf due to Iran's attacks on crude tankers trying to pass through the Strait of Hormuz.

However, the oil market believes the supply disruption will be temporary. Either the war will end, or the U.S. and its allies will fortify the Strait to ensure the safe passage of oil tankers. We see this view reflected in the oil futures market. While Brent oil currently trades over $100 a barrel for May deliveries, future contracts for deliveries later this year are in the low $80s. As a result, oil stocks are trading as if oil will soon be in the $80s, not remain in the triple digits.

Built to thrive at lower oil prices

Exxon, Chevron, and ConocoPhillips have spent the past several years reshaping their portfolios to deliver higher earnings at lower oil prices. They've sold off lower-margin assets and invested billions of dollars into acquiring and developing higher-margin oil assets. As a result, they can generate significant free cash flow at lower oil prices.

Chevron expects to reach an inflection point on its strategy this year. It completed several major growth capital projects last year, which are now ramping up. It also closed its needle-moving acquisition of Hess. These growth drivers, along with the company's cost-savings initiatives, have Chevron on track to generate an additional $12.5 billion in annual free cash flow this year at $70 Brent oil. With oil prices likely to be at least $80 for a while, it will produce an even bigger free cash flow gusher. Meanwhile, its current slate of growth projects positions it to grow its free cash flow by more than 10% annually through 2030 at $70 oil.

ConocoPhillips has lowered the breakeven level of its portfolio so that it only needs WTI in the mid-$40s to generate enough cash to fund its capital spending plan. As a result, it can generate significant free cash flow at a moderate oil price point (it produced $7.3 billion in free cash flow last year when Brent averaged $69 a barrel and WTI was around $65). The company expects to add $1 billion in free cash flow this year solely from its cost-savings initiatives. Meanwhile, it expects its long-term growth capital projects to add $1 billion to its annual free cash flow in 2027 and 2028 before hitting a $4 billion inflection point in 2029, assuming $70 WTI. ConocoPhillips can generate significantly more free cash flow if oil is above that level.

ExxonMobil raised its 2030 plan late last year. The oil giant expects to deliver $25 billion in earnings growth and $35 billion in cash flow growth by 2030, compared with the same oil prices and margins as in 2024. That's a double-digit compound annual growth rate, driven by cost-savings and expansion projects. That puts the company on track to produce $145 billion in cumulative surplus cash by 2030 at an average Brent price of $65 per barrel. It can produce significantly more free cash if Brent is above that level.

Ample fuel to continue rising

Shares of Chevron, ConocoPhillips, and ExxonMobil have surged this year. However, they haven't risen as sharply as oil prices, reflecting the expectation that crude will eventually cool off. Even if that happens, they can still thrive, as they can generate significant free cash flow growth at $70 oil through the end of the decade. That makes these oil stocks still look like compelling long-term investments even after their recent surge.

Matt DiLallo has positions in Chevron and ConocoPhillips. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.