Oil prices have surged this year. Brent oil, the global price benchmark, is up more than 30% this year, rising from $60 a barrel to around $80. Concerns about how a prolonged war with Iran might impact oil supplies are the main factor fueling the surge in crude prices.
While the current conflict could continue to push crude prices higher, oil prices might not stay high for long. Here are three oil companies that can still thrive even if oil prices fall. That makes them stand out as the top oil stocks to buy this March amid all the uncertainty facing the global oil market.
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Chevron
Chevron (CVX +2.70%) is a global oil and gas giant. Its large scale and abundance of low-cost resources enable it to thrive in almost any market environment. Chevron can generate enough cash to cover its capital spending plan and dividend at an average Brent price below $50 a barrel through 2030.
It expects to deliver industry-leading free cash flow growth this year, without any boost from oil prices. A combination of recently completed expansion projects, the closing of its merger with Hess, and its cost-savings initiatives put it on pace to generate an additional $12.5 billion in free cash flow this year if Brent averages $70 a barrel (right around last year's average). Meanwhile, Chevron expects to grow its free cash flow at a rate of more than 10% annually through 2030, fueled by the continued completion of major capital projects.
NYSE: CVX
Key Data Points
Chevron's growing free cash flow will give it more money to return to shareholders. It returned $27.1 billion to investors last year through share repurchases and dividends. The oil giant recently increased its dividend by another 4%, extending its growth streak to 39 consecutive years. Chevron's growing free cash flow and cash returns should create a lot of value for investors in the coming years, even if oil prices cool off.
ConocoPhillips
ConocoPhillips (COP +2.76%) also has a vast portfolio of low-cost oil and gas resources. Its pre-dividend free cash flow breakeven level is currently in the mid-$40s. Meanwhile, its dividend adds about $10 to the breakeven level. The company's low breakeven level enables it to generate lots of free cash flow. Last year, it generated $7.3 billion in free cash at an average Brent price of just over $69 per barrel, easily covering the $4 billion in dividends it paid.
NYSE: COP
Key Data Points
The oil giant expects to generate an incremental $1 billion of free cash flow this year, fueled entirely by its cost-savings initiatives. Meanwhile, ConocoPhillips anticipates producing an additional $1 billion in annual free cash flow in both 2027 and 2028 as its trio of global liquefied natural gas investments start-up. Finally, it expects to deliver another $4 billion uplift in free cash flow in 2029, when its Willow oil project in Alaska begins production.
ConocoPhillips' growing free cash flow will steadily reduce its breakeven level, which should fall into the low $30s by 2030. Meanwhile, its dividend will likely add another $8 to $10 per barrel. While the company expects to deliver dividend per share growth within the top 25% of S&P 500 companies during that period, its meaningful share repurchase program should steadily reduce its dividend burden.
ExxonMobil
ExxonMobil (XOM +1.29%) is one of the world's best-run oil companies. The big oil behemoth is the industry's most profitable company, delivering sector-leading earnings ($28.8 billion) and cash flow from operations ($52 billion) last year.
NYSE: XOM
Key Data Points
The oil giant envisions becoming even more profitable in the coming years. Exxon expects to deliver $25 billion in earnings growth and $35 billion in cash flow growth by 2030, compared with the same commodity prices and margins as in 2024. The company anticipates a combination of major expansion project completions and its industry-leading cost-savings initiatives to fuel its growth.
Exxon's growing cash flow will give it more money to return to shareholders. Last year, ExxonMobil delivered industry-leading shareholder distributions ($37.2 billion), including $17.2 billion in dividend payments, the second-most among S&P 500 companies. It has also grown its dividend for a sector-leading 43 consecutive years.
Top-tier oil stocks
Chevron, ConocoPhillips, and ExxonMobil expect to grow their already robust cash flows at strong rates through the end of the decade, without the benefit of higher oil prices. They're well insulated against the downside risks of lower oil prices, while also fully able to capitalize on higher crude prices. Those features make the stand out as the top oil stocks to buy this month.
