Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTIsac Simon, The Motley FoolSat, July 18, 2026 at 9:55 AM GMT+2 6 min readA classic supply-side problem currently entangles the global oil market. The protracted conflict in Eastern Europe and the volatile, seesawing geopolitical tensions in the Middle East have squeezed global crude oil supply. Crude oil prices have been at elevated levels since February, and experts conclude that this geopolitical premium isn't just a headline driver anymore — it's a fundamental regime shift.However, savvy investors will position themselves to take advantage of the unfolding situation. One of the best ways to make money is to recognize that oil companies generate significant free cash flow. In fact, investing in some of the best-known dividend-paying names in the oil and gas industry is not only an inflation hedge but also a potential path to wealth-generating opportunities.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: Getty Images.Why quality matters more than oil pricesThe best players capable of navigating this environment are high-quality operators with diversified operations around the globe, with low breakeven costs, deep inventory reserves, and, most importantly, a proven commitment to return capital to shareholders. Investing in the stocks of such businesses means they are effective inflation and fuel price hedges, as they transform rising oil prices into capital appreciation and growing cash distributions.If you are patient enough to hold on to your investment over the next few years when this new regime of elevated crude oil prices and rising inflation plays out, here are the two most attractive energy stocks to hold right now.Compounding wealth through growing dividends and buybacksIn an uncertain geopolitical environment, ExxonMobil's (NYSE:XOM) high-quality, cash-generative business offers both income generation and inflation protection. Essentially, the integrated oil company is an extremely disciplined allocator of capital, regardless of the projects it undertakes, meaning it has a deep inventory of structurally lower-cost, high-return projects.Importantly, its shareholder-friendly policy means the company has increased dividends for 43 years, at an average annual rate of 5.8%. Additionally, the company is expected to complete $20 billion in share buybacks this year. Combined, shareholder distributions for 2026 at $37.2 billion are the second highest among S&P 500 companies. That alone is sufficient to hold this stock amid uncertainty.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info