In this article, we are going to discuss the 10 most profitable energy stocks to buy now.
As of the writing of this piece, the S&P Energy index has surged by 26.52% since the beginning of 2026. This compares to gains of just under 7% posted by the overall S&P 500 during the period.
The energy sector has been the best performer so far this year, driven by the soaring oil prices amid the Iran war. The conflict has choked around a fifth of the global crude and LNG supply, causing massive disruptions and sending prices to levels last seen when Russia invaded Ukraine back in 2022.
That said, the price shock came as a boon for American producers, especially the shale operators, who had been struggling with higher costs. According to figures from Rystad Energy, the world’s biggest oil and gas companies made estimated windfall war profits of around $23 billion during the first month of the Iran war. Moreover, if the oil price continues to average around $100 per barrel for the rest of the year, these companies are expected to make $234 billion.
As a result, 38 of 40 upstream companies in the S&P 500 finished the first quarter in positive territory, while the Big Three refiners averaged returns of 48.6%. Meanwhile, the midstream sector was led by tanker stocks, which posted gains of more than 45%. Moreover, we saw several Big Oil names, including Exxon and Chevron, hitting their all-time highs in the last quarter.
Even if the war ended today, the massive war-related damage to oil infrastructure in the Middle East could keep prices high for months. According to the base case scenario at JP Morgan, a June reopening of Hormuz would maintain Brent oil price at around $100 per barrel for the rest of 2026. Moreover, the analyst firm expects that a prolonged closure of the strait would add a further $5 in the third quarter and $15 in the fourth quarter, due to the fast-depleting stocks.
With that said, here are the Most Profitable Energy Stocks to Buy in 2026.
Our Methodology
To collect data for this article, we referred to screeners to identify energy oil stocks that had a net profit margin of over 15%, as of the most recent quarter. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Most Profitable Energy Stocks to Invest in.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Venture Global, Inc. (NYSE:VG)
Net Profit Margin: 18.36%
Venture Global, Inc. (NYSE:VG) develops and constructs LNG export projects to provide clean, affordable energy to the world. The company is currently one of the largest LNG exporters in the United States.
On June 4, JPMorgan upgraded Venture Global, Inc. (NYSE:VG) from ‘Neutral’ to ‘Overweight’, while also boosting its price target on the stock from $16 to $17. The revised price goal represents an upside of over 36% from the current levels.
The ongoing US-Iran war has choked around a fifth of the global LNG supply, significantly reshaping the superchilled fuel’s supply-demand landscape. JPMorgan noted that the conflict has induced “significant volatility” in the sector and reinforced the importance of ensuring a diversified and secure energy supply. The analyst firm believes that the market is underappreciating the likelihood of sustained volatility in the LNG sector.
The LNG shipments from Qatar are significantly down and will take years to recover. According to the analyst, this presents a unique opportunity for Venture Global to capitalize on the “outsized” margins and secure both medium-and long-term contracts.
With 22 hedge fund holders at the end of Q1 in the Insider Monkey database, Venture Global, Inc. (NYSE:VG) was recently included in our list of the 12 Best LNG Stocks to Buy in 2026.
9. South Bow Corporation (NYSE:SOBO)
Net Profit Margin: 21.32%
South Bow Corporation (NYSE:SOBO) operates 3,045 miles of crude oil pipeline infrastructure, connecting Alberta crude oil supplies to US refining markets in Illinois, Oklahoma, and the Gulf Coast.
On June 9, Raymond James initiated coverage of South Bow Corporation (NYSE:SOBO) with an ‘Outperform’ rating and a price target of C$60, indicating an upside of over 19% from the current levels.
South Bow has deferred the decision to proceed with its proposed partial revival of the Keystone XL oil pipeline until mid-2027. The company announced that it will proceed with Keystone only if it has proof that a US presidential permit is “durable”, since the project was already once cancelled in 2021 when former President Joe Biden revoked its permit.
However, Raymond James believes that the Keystone XL pipeline is an “irreplaceable long-duration asset that underpins predictable cash flows for decades”. The analyst firm also expressed confidence that the proposed 550,000 bpd Alberta-to-Wyoming pipeline, dubbed Prairie Connector, will ultimately receive a positive final investment decision and will be “a game changer”.
8. Archrock, Inc. (NYSE:AROC)
Net Profit Margin: 21.48%
Archrock, Inc. (NYSE:AROC) is a leading provider of natural gas contract compression services to customers in the oil and natural gas industry throughout the United States.
On June 3, Mizuho upped its price target on Archrock, Inc. (NYSE:AROC) from $38 to $40, while keeping an ‘Outperform’ rating on the shares. The target boost represents an upside potential of almost 14% from the current share price.
Archrock, Inc. (NYSE:AROC) fell below top-line and bottom-line estimates in its Q1 report last month. However, the company grew its adjusted EBITDA by almost 12% YoY to $221 million, while its net income of $73.8 million was also up 4.1% compared to the same period last year. Adjusted gross margin for the quarter came in at $237.6 million, up 13% from $210.6 million in the first quarter of 2025.
Archrock, Inc. (NYSE:AROC) revealed that it remains on track to deliver its 2026 adjusted EBITDA guidance of $865 million to $915 million. The company also reaffirmed its growth capital plan of $250 million to $275 million for the year.
7. Tidewater Inc. (NYSE:TDW)
Net Profit Margin: 22.08%
Tidewater Inc. (NYSE:TDW) is the leading provider of larger Offshore Service Vessels to the global energy industry.
On June 5, Fearnley analyst Magnus Andersen upgraded Tidewater Inc. (NYSE:TDW) from ‘Buy’ to ‘Hold’ and assigned the stock a price target of $90, indicating an upside of 23% from the current levels. The analyst firm believes that TDW offers a robust outlook at a discounted valuation.
Tidewater Inc. (NYSE:TDW) fell behind profit estimates in its Q1 2026 report last month. However, its profits managed to top Wall Street expectations, driven mainly by higher utilization and stronger day rates. The company delivered a gross margin of just under 49% for the quarter, up slightly QoQ and over 3 percentage points above its internal plan.
Tidewater Inc. (NYSE:TDW) reaffirmed its revenue guidance of $1.43 billion to $1.48 billion for FY 2026. Moreover, it expects its gross margin to range from 49% to 51%, assuming a closing of the Wilsons acquisition by the end of the second quarter.
Black Bear Value Partners, an investment advisory firm, stated the following regarding Tidewater Inc. (NYSE:TDW) in its Q1 2026 investor letter:
“Tidewater Inc. (NYSE:TDW) increased by ~65% in the first quarter as investors rotated into energy and energy-adjacent stocks. Additionally in February, TDW acquired Wilson Sons, a leading Platform-Specialty-Vehicle (PSV) operator in Brazil.
Tidewater is a marine services firm that operates one of the world’s largest fleets of offshore support vessels (OSV’s). They serve the energy industry by transporting crew and supplies, towing and anchoring drillships and supporting offshore construction projects. The long-term outlook for international and offshore markets is strong while the near-term is a little cloudier. As current resource plays (the Permian) slow down, worldwide demand will continue to grow and require more oil. It is expected that offshore capital commitments will rebound in the next 1-2 years…” (Click here to read the full text)
6. Pembina Pipeline Corporation (NYSE:PBA)
Net Profit Margin: 22.23%
Pembina Pipeline Corporation (NYSE:PBA) is a leading energy transportation and midstream service provider that has been serving North America’s energy industry for 70 years.
On May 26, TD Securities upgraded Pembina Pipeline Corporation (NYSE:PBA) from ‘Hold’ to ‘Buy’, while also raising its price target on the stock from C$65 to C$75. The updated target indicates an upside of almost 12% from the current price level.
The upgrade reflects the analyst firm’s “more constructive” growth outlook for the Canadian energy infrastructure sector, with a particular preference to own “indirect midstream beneficiaries.” TD Securities is forecasting Pembina to deliver 4% production growth through the end of the decade, and expects the company to benefit from the soaring crude oil prices.
The analyst also highlighted Pembina Pipeline Corporation (NYSE:PBA)’s rapid expansion into adjacent opportunities such as LNG exports, power generation, and value-added NGL initiatives that capitalize on its established footprint and customer relationships.
Pembina Pipeline Corporation (NYSE:PBA) was also recently included in our list of the 14 Best Energy Infrastructure Stocks to Buy Now.
While we acknowledge the potential of PBA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PBA and that has 100x upside potential, check out our report about the cheapest AI stock.
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