Protect Your Portfolio From Inflation: Buy These 2 Energy Stocks

By Brett Schafer – Mar 26, 2026 at 3:29PM ESTKey PointsRising oil prices will help Occidental Petroleum and Chevron.Both companies have only a small exposure to the Middle East. The stocks look cheap if you believe oil will stay above $100 a barrel for 2026. Geopolitical tensions are rising, and with the Strait of Hormuz still closed to most ships, energy prices have remained elevated. Oil is now above $100 a barrel as of this writing and will likely go up even further if the strait is closed for longer. If the prices of oil and natural gas remain elevated, it will likely induce inflation in markets such as the U.S. and increase the risk of a recession. And if you are worried about how these developments may affect your portfolio, here are two energy stocks you can load up on as a hedge against inflation. Image source: Getty Images. Occidental Petroleum's North American assets Even though 15% of Occidental Petroleum's (OXY +4.03%) energy assets are in the Middle East, the oil and gas producer's stock has soared to start the year, trading up 44.5% year to date as of this writing on March 24. Investors are betting that the region's conflict will lead to increased investment in North American oil and gas projects, to which Occidental has significant exposure. And if these remain among the world's most secure ways to source oil and natural gas, those commodities may command higher selling prices as places like Europe and Asia demand petroleum to sustain their economies. ExpandNYSE: OXYOccidental PetroleumToday's Change(4.03%) $2.49Current Price$64.34Key Data PointsMarket Cap$61BDay's Range$62.15 - $64.4452wk Range$34.78 - $64.44Volume988KAvg Vol15MGross Margin31.94%Dividend Yield1.58% The last time that oil prices soared, Occidental Petroleum's free cash flow (FCF) soared to $12 billion. If prices stay above $100 a barrel throughout 2026, the company may generate even more in FCF despite the uncertainties around its Middle East assets. After the stock's recent bump, the company now has a market cap of $61 billion, which would only be around five times this level of FCF, making Occidental Petroleum a nice inflation hedge if you are worried about oil prices staying high for the long haul. Chevron's masterful pivot A company that has skillfully transitioned from the Middle East to North and South America is Chevron (CVX +1.29%). It remains one of the largest oil and gas producers in the world and recently secured a strategic win by making large investments in Venezuela and Guyana, including the acquisition of Hess Energy. With the market potentially opening up in Venezuela, this could help the company at the perfect moment to increase production as oil and gas prices rise. Chevron has only an estimated 5% of its FCF exposed to the Middle East, putting it in a much better position than the competition. Right now, the stock is up 33% in 2026, but it could still offer value to investors worried about oil prices staying higher for longer. ExpandNYSE: CVXChevronToday's Change(1.29%) $2.64Current Price$207.79Key Data PointsMarket Cap$409BDay's Range$205.16 - $209.2152wk Range$132.04 - $209.79Volume11MAvg Vol13MGross Margin14.66%Dividend Yield3.37% Shares trade at a dividend yield of 3.44%. Last time oil prices soared, Chevron's FCF zoomed up to $36 billion, which is just over 10 times its current market capitalization. This is a lower multiple than Occidental Petroleum's peak FCF, but it has now significantly expanded its production capabilities from around 3 million barrels per day in 2022 to over 4 million barrels per day this year. That could help its FCF soar, making Chevron stock still a cheap inflation hedge for any portfolio right now. Read NextMar 19, 2026 •By Matt DiLallo5 Stocks That Historically Surge When Oil Prices Spike Above $100Mar 18, 2026 •By Matt DiLalloOil Stocks Could Reap a $60 Billion Windfall if Crude Prices Remain Elevated This YearMar 17, 2026 •By Brett SchaferThe Smartest Dividend Stocks to Buy With $150 Right NowMar 15, 2026 •By Matt DiLalloOccidental Petroleum Is Up 9% Since the Iran Conflict. Here Are 2 Things Investors Need to Know.Mar 12, 2026 •By Billy DubersteinWhy Occidental Petroleum Rallied TodayMar 12, 2026 •By Ryan VanzoPrediction: Global Demand for This Oil Stock May Be Poised to ClimbAbout the AuthorBrett Schafer is a contributing Motley Fool stock market analyst covering consumer goods, financials, technology, and industrials. Brett is a self-taught investor and has hosted the Chit Chat Stocks podcast since 2018. He previously worked as a lab engineer for science laboratories. He holds a bachelor’s degree in mechanical engineering with minors in finance and mathematics from Washington State University. His lab work on Major League Baseball’s juiced ball problem was featured in The Wall Street Journal and other national outlets.TMFBrettSchaferX@CCM_BrettStocks MentionedOccidental PetroleumNYSE: OXY$64.36(+4.06%)+$2.51ChevronNYSE: CVX$207.87(+1.33%)+$2.72*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.