2 Oil Stocks Still Worth Buying With Oil Down to $70 a Barrel

Even with crude oil dipping to around $70 a barrel, ConocoPhillips (NYSE: COP) and BP (NYSE: BP) offer compelling setups for investors focused on structural efficiency, resilient cash flow, and shareholder returns. Their shares are down more than 14% and 11% over the past month, respectively, providing a good buying opportunity for investors with a long-term view.

Here are five reasons why these two energy giants remain resilient and highly attractive buys in a sub-$70 pricing environment.

Image source: Getty Images.

1. Ultra-low breakeven costs keep them profitable

Neither oil company needs triple-digit oil to keep the lights on or to make serious money. Following its 2024 acquisition of Marathon Oil, ConocoPhillips has aggressively reduced its structural supply costs. The company explores for, produces, transports, and markets crude oil, bitumen, natural gas, natural gas liquids (NGLs), and liquefied natural gas (LNG) across 14 countries.

A substantial portion of its premier acreage, particularly in the Permian, Eagle Ford, and Bakken basins, has kept its cost of supply below $40 per barrel for decades. Because most of its production is in the Lower 48 states, the company isn't as affected by the unrest in the Middle East.

BP, driven by aggressive corporate restructuring and a target of $6.5 billion to $7.5 billion in structural cost reductions through 2027, has engineered its portfolio to comfortably sustain operations and cover its base dividend.

The company maintained strong production in the first quarter, and refining throughput was more than 1.5 million barrels per day, its highest quarterly figure in four years. Replacement cost profit per share was $20.67, up 136% year over year.

2. Aggressive corporate cost-cutting and synergies

Both management teams adapt easily to lower prices by tightening their capital belts, prioritizing structural efficiency over unbridled production growth. ConocoPhillips is actively executing a $1 billion capital and operating cost-reduction program for 2026. This builds directly on the post-merger integration synergies from Marathon.

BP is tightly capping its annual capital expenditure between $13 billion and $13.5 billion, prioritizing high-margin upstream developments and major discoveries, such as its massive Bumerangue find off the coast of Brazil, over low-margin barrels.

3. Solid shareholder returns

When oil prices soften, these companies shift their excess cash straight back to investors rather than burning it on expensive new drilling projects. They both have excellent dividends, with BP's yielding 5.3% and ConocoPhillips' yielding 3.1% at their current share prices.

ConocoPhillips, in the first quarter, said it remains committed to returning 45% of its cash from operations (CFO) to shareholders via a competitive mix of base dividends, variable return of cash (VROC), and share repurchases.

BP continues to prioritize a rock-solid base dividend alongside targeted share buybacks, supported by a three-year asset divestment program expected to generate $20 billion by 2027. The company just completed a $500 million share buyback program.

The combination of dividends and share buybacks contributes to solid total returns for the stocks. Over the past decade, BP stock has returned more than 93%, and ConocoPhillips has returned more than 220%.

4. Valuation discounts and sector diversification

Buying into the price dip for BP and ConocoPhillips allows investors to capture distinct, complementary business models at a discount. The two stocks are trading below 11 times forward earnings (ConocoPhillips) and below 8 times forward earnings (BP).

ConocoPhillips is an exploration and production powerhouse. Because it lacks a refining arm, it offers the cleanest, most efficient operating leverage to the eventual rebound of crude prices.

BP, on the other hand, provides an integrated safety net. When crude prices fall, its downstream customers and products division, which includes refining, marketing, and retail, historically captures higher profit margins, effectively acting as an internal hedge against lower raw commodity prices.

5. Demand will ramp up as countries restock

In the short term, crude oil prices may initially continue to drop as oil producers ramp up exports once the Strait of Hormuz is fully reopened. However, major economies are likely to move to restock their heavily depleted oil reserves, such as rebuilding the U.S. Strategic Petroleum Reserve (SPR), which is at its lowest level since 1983, and refilling commercial stockpiles drained during recent Middle East supply crunches.

In many cases, the companies these economies will turn to are those with stable oil production outside the Middle East, and BP and ConocoPhillips, with the vast majority of their production concentrated in North America, Europe, and other non-Middle Eastern regions, should benefit.

James Halley has no position in any of the stocks mentioned. The Motley Fool recommends BP and ConocoPhillips. The Motley Fool has a disclosure policy.