Why One Energy Expert Is Betting on These 3 Oil Stocks Now

Energy markets have been anything but calm lately. Oil prices surged before pulling back again as geopolitical tensions in the Middle East sent shockwaves through global markets. While that kind of volatility can make investors uneasy, it can also create opportunities.

In a recent conversation with Marc Lichtenfeld of the Oxford Club, the discussion focused on how investors can navigate this environment and where some of the most compelling opportunities may be in the energy sector right now. Lichtenfeld shared three companies he believes offer a mix of strong fundamentals, income potential and exposure to key parts of the energy supply chain.

Geopolitical Tensions Are Driving Oil Price Volatility

Recent geopolitical developments have quickly reminded markets how sensitive oil prices are to global events. Supply disruptions and concerns about key transportation routes can quickly send prices higher.

Lichtenfeld pointed specifically to tensions involving Iran as a major catalyst for the recent moves.

“Given what’s happening geopolitically… oil prices are going to spike,” Lichtenfeld explained. “I’d be surprised if oil comes all the way back down and settles where it was before the war started.”

One key factor investors are watching is the Strait of Hormuz, a critical shipping lane for global oil supply. If that route faces disruption, the impact on prices could be significant.

Until the situation stabilizes, Lichtenfeld expects continued pressure on energy markets.

“Until we know that the Strait of Hormuz is wide open and traffic can flow through there freely, there’s going to be price pressure on oil,” he said.

Because of that uncertainty, Lichtenfeld is focusing on companies operating primarily in North America rather than relying on overseas supply chains.

APA Offers Value in the Upstream Segment

The first stock highlighted in the conversation was APA Corporation (NASDAQ: APA), an oil and gas producer operating primarily in the Permian Basin as well as the North Sea.

APA represents the upstream portion of the energy industry—companies that pull oil and gas out of the ground.

Lichtenfeld believes the company stands out because of its improving financial performance and attractive valuation.

“It’s a company that’s been around for a long time, it’s well managed and generating lots of cash flow,” Lichtenfeld said. “It trades at just eight times earnings and less than three times cash flow, so I think it’s a bargain.”

The company has also made significant progress on its cost-reduction strategy, reaching savings goals earlier than expected. That improvement in efficiency could help boost margins and continue driving earnings growth.

For investors looking for exposure to oil producers without paying premium valuations for larger names, APA may represent an attractive opportunity.

Marathon Petroleum Could Benefit From Refining Margins

The second company discussed was Marathon Petroleum Corporation (NYSE: MPC), which represents the downstream side of the energy industry.

Marathon Petroleum operates the largest refining system in the United States and can process roughly three million barrels of oil per day. That scale gives the company a powerful position when refining margins expand.

Periods of oil price volatility can actually benefit refiners.

“When oil prices are volatile or rising, you tend to see margins improve at refineries,” Lichtenfeld explained.

That dynamic has already begun to show up in the company’s results. The business has posted strong earnings growth and continues to generate significant cash flow.

Lichtenfeld also emphasized that the stock’s technical trend supports the bullish outlook.

“I like to buy things that are rising,” he said. “I’m not a bottom feeder. I don’t try to pick the bottom.”

With the stock already trading in a strong uptrend, the company could continue benefiting if oil market volatility keeps refining margins elevated.

Enterprise Products Partners Provides Income and Stability

The final stock on Lichtenfeld’s list focuses on the midstream segment of the energy industry: pipeline infrastructure.

Enterprise Products Partners L.P. (NYSE: EPD) operates a vast network of pipelines that transport oil and natural gas throughout the United States.

Midstream companies often generate stable cash flow because they operate more like infrastructure providers than commodity producers.

“These companies are basically toll collectors,” Lichtenfeld said. “The companies transporting their oil and gas just pay a fee to use the pipeline.”

Because of that structure, Enterprise Products Partners produces consistent income for investors.

The partnership currently offers a distribution yield of nearly 6% and has increased its payout for more than 25 consecutive years.

The company’s master limited partnership structure also offers potential tax advantages for investors, making it particularly attractive for those seeking income.

Diversification Within Energy

One key theme from the conversation with Marc Lichtenfeld was diversification within the energy sector itself.

Rather than focusing only on producers or refiners, Lichtenfeld prefers a mix of companies across the supply chain—upstream, midstream and downstream.

That approach helps balance risk because each segment tends to perform differently depending on market conditions.

With oil prices reacting to global events and supply risks, energy stocks could remain in focus throughout the year. For investors looking to position themselves in the sector, these three companies offer exposure to different parts of the energy ecosystem while potentially benefiting from continued volatility.

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