In this article, we are going to discuss the best crude oil stocks to buy according to hedge funds.
The global crude oil prices witnessed a slight surge this week following the announcement of a trade deal between the United States and the European Union, and an announcement by President Trump that he would shorten the deadline for Russia to end its war in Ukraine or face sanctions. Moreover, the possible extension of the US-China tariff pause before an August 12 deadline has also provided support to global financial markets and crude prices.
As part of the historic trade deal, the EU has pledged to massively ramp up energy imports from the United States to $250 billion annually for three years. However, it remains to be seen whether such a massive scale of energy trade is even possible, since the total exports of American crude oil, LNG, and metallurgical coal (the three commodities that the EU is most likely to acquire) amounted to approximately $166 billion in 2024 at around current prices. This means that even if the European bloc bought this entire volume, it would still fall significantly short of the $250 billion target.
Our Methodology
To collect data for this article, we scanned Insider Monkey’s database of hedge funds’ stock holdings and picked the top 12 companies operating in the crude oil sector with the highest number of hedge fund investors in Q1 of 2025. The Following are the Best Oil Stocks to Invest in According to Hedge Funds.
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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 50
To make sure it can not only survive but thrive through the expected slowdown in global crude oil demand, Shell plc (NYSE:SHEL) announced earlier this year that it would lower its spending to $20-22 billion annually through 2028, while increasing shareholder distributions to 40-50% of cash flow from operations, up from a 30-40% range previously.
Shell plc (NYSE:SHEL) also announced a $3.5 billion share buyback program in May, marking the 14th consecutive quarter in which the company has announced $3 billion or more in buybacks. The oil producer is able to maintain its shareholder payouts even in low-priced environments, given its low distribution breakevens – $40 Brent for dividends, and buybacks continuing at $50.
Shell plc (NYSE:SHEL) is also a top player in the rapidly expanding LNG sector, and the company recently revealed that it expects to add up to 12 million metric tons of additional LNG capacity by the end of the decade. The company has several new projects coming online, including one in Canada, two in Qatar, and others in Nigeria and the UAE.
Artisan Partners stated the following regarding Shell plc (NYSE:SHEL) in its Q1 2025 investor letter:
“Shell is one of the world’s largest integrated oil and gas companies. The business has a durable portfolio of oil and gas resources, which includes a global leadership position in liquefied natural gas (LNG), an attractive and growing market.
The business has been materially transformed over the past two years by a new management team that understands value creation. CEO Wael Sawan and his team have adjusted the capital investment plan to be more focused on the core business and generating returns. Management has also used the company’s strong free cash flow (FCF) to add significant value for shareholders through capital allocation. Over the last three years, Shell has produced about $100 billion in FCF, and the management team has returned all of it through a combination of dividends, buybacks and debt reduction. The current market capitalization is about $200 billion, which means the company has returned over half the market cap to shareholders over the past three years…” (Click here to read the full text)
Shell plc (NYSE:SHEL) is a global group of energy and petrochemical companies with operations in more than 70 countries.
11. Permian Resources Corporation (NYSE:PR)
Number of Hedge Fund Holders: 52
One of the fastest-growing companies in the American crude oil sector, the share price of Permian Resources Corporation (NYSE:PR) has gained by more than 1,600% over the last five years. The oil producer continues to expand its portfolio and announced in May that it had reached an agreement to buy core assets in the Delaware basin from APA Corp. The deal, valued at $608 million, added 13,320 net acres, 8,700 net royalty acres, and 12,000 Boe/d to PR’s portfolio.
The key strength of Permian Resources Corporation (NYSE:PR) lies in its low breakeven cost of $40 per barrel, allowing it to remain profitable and grow even during times of high price volatility. Moreover, the company revealed that it has approximately 25% of 2025 oil production hedged at a price just above $73 per barrel, allowing it to be more opportunistic during a downturn when investments can earn the highest return.
Permian Resources Corporation (NYSE:PR) is also known for its high shareholder returns and, as of the writing of this piece, boasts a hefty annual dividend yield of 4.79%, putting it among the 12 Best Oil and Gas Dividend Stocks to Buy Now.
Artisan Partners stated the following regarding Permian Resources Corporation (NYSE:PR) in its Q1 2025 investor letter:
“We made one new purchase this quarter, adding Permian Resources Corporation (NYSE:PR), an independent oil and gas company. PR is focused solely on the Delaware Basin of West Texas and southwestern New Mexico—the most prolific oil-producing region in the US. The founders and co CEOs, who also have large ownership interests in the business, have sought to build a business that can produce substantial free cash flow, return capital to shareholders and generate attractive equity returns across varied commodities price environments. To achieve these goals, PR has pursued best-in-class operations and responsible capital stewardship by thoughtfully acquiring assets it believes are undervalued and divesting acreage it believes would be better in someone else’s hands, while meaningfully returning capital to shareholders in the form of dividends. We always seek to align ourselves with shareholder-oriented management teams, but this is even more critical when investing in mid-sized energy companies given their dependence on the underlying commodity prices and minimal diversification by business and geography as well as the sector’s general predilection for reinvesting capital for growth rather than returns. Shares were rangebound for much of 2024 as macro fears have weighed on oil prices and energy sector stocks, giving us an opportunity to purchase a strong operator at a favorable price.”
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company with operations focused in the Permian Basin, with assets concentrated in the core of the Delaware Basin.
10. Valero Energy Corporation (NYSE:VLO)
Number of Hedge Fund Holders: 55
The share price of Valero Energy Corporation (NYSE:VLO) slumped despite posting better-than-expected results for its Q2 2025 last week. The company’s adjusted EPS of $2.28 was below the $2.71 it posted in the same period last year, but still managed to beat expectations as a rebound in refining margins helped cushion losses in the renewable diesel segment. Valero’s core Refining segment reported an operating income of $1.3 billion during the quarter, compared to $1.2 billion last year, boosted by higher margins.
Despite a drop in profits, Valero Energy Corporation (NYSE:VLO) remains committed to its shareholders and announced a quarterly dividend of $1.13 per share. The company also returned $695 million to stockholders in the second quarter of 2025, including $354 million as dividends and $341 million in the form of stock buybacks.
Valero Energy Corporation (NYSE:VLO) is the largest independent petroleum refiner in the world and a leading producer of low-carbon transportation fuels.
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