Saudi Arabia isn't messing around. The major oil-producing country recently revealed that it would extend its current 1 million barrel per day (BPD) production cut for another month, pushing it out until the end of August. That will remove additional supplies from the oil market when it's starting to get very tight. The move shows that Saudi Arabia will do whatever it takes to push oil prices higher. 

That's great news for oil stocks. Higher oil prices would enable oil companies to produce more cash flow, which should boost their share prices and ability to return cash to shareholders. While rising oil prices should lift all producers, Devon Energy (DVN 0.19%), Pioneer Natural Resources (PXD -2.28%), and Diamondback Energy (FANG 0.32%) stand out as some of the top stocks to buy because they plan to return most of their oil-fueled cash flows to investors.

Collect half its oil-fueled windfall in cash

Devon Energy enables investors to immediately cash in on higher oil prices. The oil company launched the industry's first fixed-plus-variable dividend framework a few years ago. In addition to paying a fixed base dividend each quarter, Devon pays out up to half of its quarterly free cash flow to shareholders through its variable dividend. That means rising oil prices mean more cash will flow directly to shareholders through dividends. 

Devon has the flexibility to use the cash it retains to make acquisitions, strengthen its balance sheet, and repurchase shares. Given the nearly 40% decline in its stock from its 52-week high, Devon has been buying back shares hand over fist. CEO Rick Muncrief stated on the first-quarter conference call: 

We continue to see attractive value in repurchasing our shares, which we believe traded a significant discount to our intrinsic value. To capitalize on this compelling opportunity, we made substantial progress advancing our buyback program by repurchasing $692 million of shares year to date. In addition to our corporate buyback activity, multiple members of our management team, myself included, have also demonstrated their conviction in Devon's value proposition by purchasing stock in the open market over the past few months.

The company recently boosted its buyback authorization by 50% to $3 billion. That's enough to retire 9% of its outstanding shares at the recent price. Higher oil prices would enable the company to generate more cash to execute its buyback program faster. That falling share count plus a rising dividend should give Devon's stock plenty of fuel to rally if Saudi Arabia's plan to push oil prices higher is a success.

The flexibility to switch how they reward investors

Pioneer Natural Resources and Diamondback Energy have nearly identical capital return frameworks. The oil companies each pay fixed base dividends. In addition, they aim to return up to 75% of their total free cash flow to shareholders. They have the flexibility to deliver on that objective by repurchasing shares and paying variable dividends.

Given the decline in their share prices -- both currently sit more than 20% below their 52-week highs -- they've been putting greater emphasis on repurchasing shares this year. Pioneer bought back $500 million of its shares in the first quarter and launched a new $4 billion repurchase program. Meanwhile, Diamondback Energy took advantage of the market dislocation caused by the banking crisis in the first quarter to buy back a boatload of its stock ($332 million of repurchases versus $153 million in dividends).

The companies will likely continue using their oil-fueled cash flows to repurchase shares while they remain low. However, as they produce more free cash, they'll likely reopen the spigots by paying much higher variable dividends. Those increasing cash returns could give their shares the fuel to rally sharply in a rebound in the oil market.

Great ways to cash in on higher crude prices

Devon Energy, Pioneer Natural Resources, and Diamondback Resources return the bulk of their oil-fueled cash flows to investors. That means higher oil prices will give them more money to send back to shareholders. And that positions this trio to potentially produce high total returns if Saudi Arabia's plan to push oil prices higher succeeds. They're ideal oil stocks to buy in hopes of cashing in on that rebound.