This year's rally in oil has been one of the market's most influential stories. Driven largely by potential escalations in Middle East unrest, oil prices have moved higher by roughly 15% in the last year. These moves could be viewed as surprising by some, given the fact that countries like Syria account for a relatively small portion of the world's daily oil production (a mere 400,000 barrels per day).

But the real issue here is the possibility that political tensions and military conflicts could disrupt major transportation routes, and limit the globe's available energy supply. And when we look at the elevated oil valuations that have held in place (with little in the way of downside corrections), it is clear that investors see limited credibility in the attempts made by regional governments to calm fears, prevent further violence, and assure markets that important trade routes like the Suez Canal will operate at full capacity.

Oil companies positioned to capitalize on market trends
Since there is little reason to believe these trends will change anytime soon, it makes sense to look at oil producers that have limited exposure to the in the Middle East but are still positioned to benefit from the higher prices. The U.S. is still the world's largest consumer of oil at around 20 million barrels per day. It might be surprising to know, however, that most of this oil is imported from Canada -- not the Middle East. So, how can investors play these scenarios?

One choice is Enerplus Resources Fund (ERF 0.25%), which is the biggest North American oil and natural gas income fund investing in mature development properties in Western Canada.

The company's second-quarter earnings report showed 10% gains in annual production, and the stock is supported by a strong dividend yield at nearly 6.4%. This elevated dividend will help the stock generate consistent gains even if we start to see declines in the underlying oil price.

With a market cap of $3.4 billion, Enerplus is composed of diversified growth resources that are high-quality and positioned to benefit from this year's energy trends. Most of the company's focus is centered on properties in Western Canada that have reached the mature development stage. Last year, U.S. oil imports from Canada were nearly double what came out of Saudi Arabia, so the investment strategy at Enerplus is set to take advantage of elevated oil prices and is relatively protected from Middle Eastern conflict at the same time. The stock has seen strong rallies this year (rising 36% year to date), but when we look at broader time horizons, the potential for significant upside can still be seen.

Transformation period at Suncor?
Another option is Suncor Energy (SU 0.31%), which has seen large stakes established by some well-known investors (T. Boone Pickens, Warren Buffett) in recent months. Investor concerns with respect to Suncor's takeaway capacity led to significant weakness in market valuations over the last few years. Increases in mid-continent oil productivity created transport bottlenecks and large discounts in WTI crude (relative to Brent crude). This put pressure on the stock, and Suncor is now trading at roughly half of the value seen during its 2008 highs.

But the building of new pipelines (such as the Keystone-XL project) and new outlets in rail infrastructure have removed many of these constraints. This supports the company's outlook for future growth and productivity levels. The production outlook for the second half of this year calls for an increase of nearly 30% relative to the first and second quarters. And when we add the stock's 2.4% dividend yield, the company looks like a secure, low-risk investment at current levels.

A choice for growth investors
For growth investors, Octagon 88 Resources (OCTX) offers an interesting alternative for those looking to gain exposure to oil markets and avoid the added risks seen in the Middle East. With a market cap of $166 million, the stock has traded mostly sideways since mid-March, missing most of the rally seen in energy markets. But this could change in the next few months as significant new projects come online.  

One example can be seen in Octagon 88's recent progress at its Peace River development in Alberta, Canada. Peace River is one of the largest oil sands locations in the region, and this creates the potential for 1.6 billion barrels in added oil productivity for the company. This could have drastic implications on the earnings outlook for Octagon 88 over the next few quarters. The stock has yet to benefit from this year's big rallies in the underlying oil price, so the company's encouraging set of development projects suggests solid potential for bullish moves as we head into next year. 

Bottom line
So, while we have seen impressive bull runs in energy prices and the associated stocks, there are still values that can be found for those using longer-term time horizons.

Investments like Enerplus and Suncor offer strong dividends and solid exposure to critical markets while Octagon 88 is a better play for those looking for a growth stock that has yet to participate in the rallies seen in the broader sector. All three offer exposure to oil markets without the added risks or potential volatility that could be seen if conflicts in the Middle East fail to resolve themselves.