2 Great Dividend-Paying Oil Stocks to Buy as Oil Surges

By Scott Levine and Lee Samaha – Mar 21, 2026 at 2:14PM ESTKey PointsChevron has demonstrated a multi-decade commitment to increasingly rewarding shareholders.Diamondback's operations are insulated from international conflict, and it offers investors a combination of a growing base dividend, opportunistic share repurchases, and variable dividends.The market volatility stemming from the conflict in Iran is enough to rattle the nerves of even the most experienced investors. While some are fleeing to gold investments to fortify their portfolios, there are better opportunities than the precious metal. With energy prices elevated right now, oil dividend stocks, for example, represent excellent choices. Those committed to digging through the oil patch for a passive income investment don't need to look much further than these oil dividend stocks that two Fool.com contributors recognize as great opportunities right now. Image source: Getty Images. A multi-decade history of hiking its dividend makes this energy stalwart a great consideration Scott Levine (Chevron): While the 3.6% forward dividend yield is certainly nothing to sneeze at, this one figure belies another number that speaks a lot louder to the Chevron (CVX +0.12%) stock's allure as a passive income investment: the multi-decade dividend increase streak. ExpandNYSE: CVXChevronToday's Change(0.12%) $0.24Current Price$201.68Key Data PointsMarket Cap$403BDay's Range$201.21 - $205.0652wk Range$132.04 - $205.08Volume592KAvg Vol12MGross Margin14.66%Dividend Yield3.43% For 39 consecutive years, Chevron has maintained annual dividend increases, a feat few companies can claim, let alone energy stocks. Over the past four decades, there have been booms and busts in energy prices, and all the while, Chevron has continued to raise its dividend. This achievement speaks to management's prowess in maintaining its financial health during periods of lower energy prices. Of course, it's not simply that the company has achieved a 39-year streak of hiking its dividend higher that should encourage prospective investors. During a recent investor presentation, Chevron asserted that it will reach breakeven for 2026 to 2030, including dividend and capital expenditures, even if the oil benchmark Brent crude falls to $50 per barrel. While some of Chevron's upstream operations may be affected by the conflict in Iran and the closure of the Strait of Hormuz, it's important to note the company's expansive global footprint, including in the Bakken Formation and Permian Basin in the United States, as well as in the Gulf of Mexico. Beyond the U.S., Chevron operates in numerous regions, including Guyana, Venezuela, West Africa, and Australia. For a conservative passive income play, Chevron stock is a great option. A dividend-paying oil company trading at a highly attractive valuation Lee Samaha (Diamondback Energy): Whether the recent spike in the oil price proves sustainable or not, Diamondback Energy (FANG +1.17%) is a good value stock to buy. The reality is, it's extremely hard to predict where oil prices will be in the future, let alone play the guessing game about where geopolitical conflict is headed or the state of shipping energy through the Strait of Hormuz. However, we do know that oil is often produced in less stable regions and is susceptible to price volatility. We also know that Diamondback Energy produces energy in the U.S., with a major focus on the Permian Basin, is conservatively run with an investment-grade balance sheet, generates a steady stream of cash, and has a $4.20 base dividend (currently yielding 2.4%) protected even if oil drops to $37 a barrel. ExpandNASDAQ: FANGDiamondback EnergyToday's Change(1.17%) $2.23Current Price$192.54Key Data PointsMarket Cap$54BDay's Range$190.02 - $194.6852wk Range$114.00 - $194.68Volume4.6MAvg Vol2.6MGross Margin35.16%Dividend Yield2.10% Management estimates that its free cash flow (FCF) in 2026 could range from $3.1 billion at an oil price of $50 a barrel to $6.7 billion at $80 a barrel. To put those figures into context, based on the current market cap, those figures would put Diamondback on 17.6 times FCF in 2026 at $50 a barrel, ranging to 7.7 times FCF at $80 a barrel. The current price is about $110 a barrel. All told, the risk looks skewed to the upside for the stock. There's no guarantee the price of oil will stay high. Still, you would have to believe it will fall substantially to avoid making the oil stock look like a good value investment. Should you fuel your passive income stream with Diamondback Energy and Chevron stocks now? Since investing goals vary, there's no single stock that will appeal to everyone. That said, Chevron stock will appeal to those looking to balance passive income with reduced risk exposure. On the other hand, investors looking for a value option will find Diamondback Energy more alluring right now.Read NextMar 20, 2026 •By Stefon WaltersWhat Is One of the Best Energy Stocks to Hold for the Next 10 Years?Mar 19, 2026 •By Reuben Gregg BrewerHere's What Falling Oil Prices Mean for These 3 Energy StocksMar 19, 2026 •By Thomas Niel3 of the Best Energy Stocks to Buy Right NowMar 18, 2026 •By Justin Pope4 Dividend Energy Stocks to Buy in MarchMar 18, 2026 •By Matt DiLalloCould an Oil Deal in Venezuela Boost Chevron's Stock?Mar 17, 2026 •By Reuben Gregg BrewerOil Stocks Are Soaring, But Here Are 3 Considerations For Investors Before They BuyAbout the AuthorScott Levine is a contributing Motley Fool stock market analyst covering energy, industrials, technology, and materials. He is also a high school English teacher and a small business owner. He holds a bachelor’s degree in English and creative writing from Binghamton University, a master’s degree in secondary education from Adelphi University, and an advanced certificate in school building leadership from CUNY Queens College. A crossword puzzle enthusiast, he has solved more than 3,100 New York Times puzzles with a 97% solve rate.TMFProudMonkeyX@TMFProudMonkeyStocks MentionedChevronNYSE: CVX$201.68(+0.12%)+$0.24Diamondback EnergyNASDAQ: FANG$192.48(+1.14%)+$2.17*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.