The geopolitical conflict in the Middle East has made oil prices a near-daily topic of conversation in the media. That's understandable, given the immediate impact that the conflict is having on energy prices. But the really important takeaway from the conflict isn't the impact it is having on commodity prices; it is the vital role that oil and natural gas play in the global economy.
Shell (SHEL +1.62%) CEO Wael Sawan recently spoke at a Wall Street Journal conference. The CEO highlighted oil's role in the world, noting that Shell believes oil prices will rise over the longer term, even after the Middle East conflict ends. Here's what you need to know and why you should add some energy exposure to your portfolio.
Image source: Getty Images.
Clean energy won't be enough
For years, the big story in the energy sector has been clean energy, like solar and wind power. There is a material opportunity there, but the idea that these power sources will replace carbon fuels isn't likely. The problem is multifaceted. However, a key factor is that energy demand is expanding as the global economy grows. Clean energy alone isn't likely to be enough to keep up with demand.
Notably, oil and natural gas accounted for a combined 32% of global demand in 2025, according to the International Energy Agency (IEA). Demand for both grew in 2025, even as other energy sources expanded. Meanwhile, as Shell points out, oil and natural gas are depleting resources, so each barrel pulled from the ground means there's one less barrel available. Shell pegs production declines from oil and natural gas sources at 5% to 7% per year.
NYSE: SHEL
Key Data Points
Shell CEO Wael Sawan's warning that oil and gas prices are heading higher over the longer term is just putting the pieces of the puzzle together. Higher demand, or at the very least stable demand, and falling supply in a commodity market lead to higher prices. While most investors are focused on the daily swings in oil caused by the Middle East conflict, Shell is looking at the big picture. You should, too.
Shell is among an elite group of energy companies
Shell is an integrated energy company, meaning it has exposure to the entire energy value chain. That includes production (upstream), transportation (midstream), and chemicals and refining (downstream). It also operates a globally diversified portfolio. The company's peers include ExxonMobil (XOM -0.97%), Chevron (CVX +2.35%), and TotalEnergies (TTE +0.95%), all of which rank among the world's largest energy companies.
NYSE: CVX
Key Data Points
Given the importance of energy to the global economy, most investors should have some exposure to the sector. An integrated energy giant is a good choice to fill that portfolio slot. U.S.-based Exxon and Chevron stand out from the pack for reliability, with Exxon having increased its dividend annually for 43 years. Chevron isn't far behind at 38 years. If you are looking for reliable dividends, these two should be your first stop. Chevron's dividend yield is 3.7%, while Exxon's is 2.6%, likely making Chevron the go-to option for most.
NYSE: XOM
Key Data Points
Shell and TotalEnergies are both European businesses. That gives these energy giants a slightly different focus, given that providing Europe with energy is a core focus. Shell has the unfortunate distinction of cutting its dividend in 2020, while stating it would invest more heavily in clean energy. That plan has since been changed, with Shell refocusing on oil. Essentially, it is doubling down on the company's own long-term energy thesis. The dividend is growing again, too, and the stock yields 3.6%.
NYSE: TTE
Key Data Points
TotalEnergies stands out because it didn't cut its dividend, even as it began investing more heavily in clean energy. Unlike Shell, however, TotalEnergies has continued to expand its clean energy business. For investors seeking a clean energy hedge along with their oil investments, it could be a good option. The stock yields around 5%.
Shell is looking beyond current events, and so should you
The geopolitical conflict in the Middle East is a huge global event, so it makes sense that investors are focused on it. However, you shouldn't get so myopically focused on the present that you ignore the future. Shell's warning about oil prices is all about the future. You should pay close attention and consider adding some energy exposure to your portfolio today. Integrated giants such as Shell, Exxon, Chevron, and TotalEnergies are all solid options.
