Oil Prices Are Near Multiyear Highs. Here's the Best Energy Stock to Buy With $1,000.

Brent oil, the global benchmark price, has soared past $100 a barrel this year. It's at its highest level since 2022. Crude prices could rise further if Iran continues to target energy in response to military strikes by the U.S. and Israel.

Higher oil prices should benefit most energy stocks. However, Chevron (NYSE: CVX) is in one of the strongest positions to cash in on higher crude prices this year. That makes it the best energy stock to buy with $1,000 right now.

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The perfect time to hit an inflection point

Chevron has spent the past several years upgrading its global oil and gas portfolio. It has invested heavily in acquiring and developing low-cost energy resources. Last year marked a big year for the oil company as it completed several major growth capital projects. Chevron also finally closed its needle-moving acquisition of Hess in 2025.

As a result, the oil giant will hit an inflection point in 2026. The company expected its growth investments to deliver $10 billion in incremental free cash flow this year, assuming oil averages $70 a barrel. Meanwhile, the Hess merger will add another $2.5 billion to its annual total. That's $12.5 billion of additional cash with no improvement in crude prices, a meaningful boost for a company that produced $20.2 billion in adjusted free cash flow last year.

Cashing in on higher energy prices

Chevron's massive global scale and low-cost resources put it in a strong position to cash in on higher energy prices. Every $1 change in Brent oil prices will boost its annual earnings and cash flow by $600 million. Meanwhile, every $1 change in the international spot price for liquified natural gas (LNG) will increase its annual earnings and cash flow by $150 million. Given the damage to LNG infrastructure in Qatar due to the war, Chevron's global LNG business should get a boost long after the war ends.

As a result, Chevron should reap a huge windfall this year if energy prices remain elevated. That will enable the energy giant to further strengthen its fortress balance sheet, putting it in an even stronger position to weather future energy market downturns. Chevron can also continue returning more cash to shareholders. Last year, Chevron sent a record $27 billion back to shareholders through dividends ($12.8 billion) and repurchases ($12.1 billion of its shares and another $2.2 billion of Hess shares on the open market before the deal closed). The company has already raised its dividend this year and will likely repurchase shares toward the high end of its $10 billion to $20 billion annual target range.

Chevron timed its inflection perfectly

Chevron was already on track for a strong year after completing several major expansion projects and its Hess merger last year. That puts it in an even better position to cash in on higher energy prices this year. They'll enable the energy giant to further fortify its already elite balance sheet and return more of its growing free cash flow gusher to shareholders. Chevron's massive leverage to higher energy prices makes it a top oil stock to buy right now.

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