3 Bold Oil Predictions for the Second Half of 2026

The geopolitical conflict in the Middle East has cycled through peace talks and renewed conflict. It appears there won't be an easy solution, which isn't exactly shocking. However, the conflict has material implications for the world, given the importance of energy to the global economy. Here are three oil predictions for the second half of 2026 that may help you weather the turmoil a bit more easily.

1. Oil prices are going to be a rollercoaster ride

Oil and natural gas prices are particularly volatile right now. Swinging higher and lower on news from the Middle East. But the news about the conflict is actually overpowering news about the fundamentals of the energy sector. In fact, companies like ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and Shell (NYSE: SHEL) have warned that oil prices are likely to remain high even after the conflict ends.

Image source: Getty Images.

The near-term story that Exxon and Chevron have been discussing is about supply and demand. First, it will take time to restore supply to pre-conflict levels. Second, oil stockpiles have been drawn down so deeply that it will take time to replenish them. Both hint that supply and demand will take a while to balance out again.

Shell's warning is longer-term. Oil and natural gas demand continue to increase due to a growing global population and economic growth in developing nations. But oil and natural gas are depleting assets, so as these vital energy commodities are extracted, there is less to extract in the future. Once again, there's a supply and-demand imbalance that will likely keep prices high.

The big takeaway here is that the conflict is grabbing headlines, but there's more going on beneath the surface that will drive volatility in the energy sector over the next few months and beyond.

2. You should forget about oil prices

For many investors, the biggest surprise in the second half of 2026 may be that you don't have to worry about energy prices. That's because you can buy North American midstream businesses like Enterprise Products Partners (NYSE: EPD) and Enbridge (NYSE: ENB). These companies help to move oil and natural gas, collecting fees for the use of their energy infrastructure assets, such as pipelines.

The price of oil and natural gas is less important than the demand for those commodities. The conflict has shown that demand for these fuels remains robust. And since North America is a fiscally and geographically stable region, the conflict may even lead countries worried about energy security to shift their buying habits. That could mean even more demand to support the businesses of Enterprise and Enbridge.

The real benefit, however, is the dividends. Enterprise's distribution yield is a lofty 5.7% and backed by 27 years of annual increases. Enbridge's dividend yield isn't far behind at 5%, backed by 31 annual increases (in Canadian dollars). If you want energy exposure without the commodity risk, a pipeline stock could be the right call for the second half of 2026 and in the years ahead.

3. Dividends will tell you more than oil prices

Energy prices are clearly important for energy companies. However, the world's largest energy companies are used to dealing with energy volatility like the world is seeing today. They have learned to survive the entire energy cycle, building diversified businesses that are robust to what are, in fact, fairly normal commodity price swings. In the second half of 2026, you should probably focus on the biggest and best of the industry and look more closely at dividends.

The leader here is Exxon, with 43 annual dividend increases. But Chevron isn't far behind at 38 years. That said, Exxon's dividend yield is 2.6%, while Chevron's is 3.8%. For most dividend investors, Chevron will probably be the better option. The big takeaway is that dividends have, over time, told investors more about the resilience of these businesses than the earnings swings driven by volatile oil prices. That is likely to remain true for the rest of 2026 and for the foreseeable future, too.

News is important, but not the whole story

Right now, the Middle East has captured the world's attention, and for good reason. But the energy sector is large and complex, a fact that the end of the conflict won't change. Most investors should have some energy exposure, but the decision on which stocks to buy shouldn't be driven by the conflict or near-term swings in oil prices. A long-term view is necessary, with high-yield midstream stocks and reliable dividend-paying industry giants likely to be your best long-term investment options.

Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Chevron and Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.