In this article, we are going to discuss the 8 best oil and gas penny stocks to buy now.
The global oil and gas prices have received a massive boost from the ongoing US-Iran war, which has led to Iran blocking the Strait of Hormuz. The waterway handles around a fifth of the global crude oil and LNG supply. Moreover, both sides have carried out several attacks on the region’s key energy infrastructure, leading to further supply disruptions.
Moreover, the global oil market was further jolted when Russia recently announced that at least 40% of its oil export capacity is currently at a halt following the Ukrainian drone attacks, a disputed attack on a major pipeline, and the seizure of tankers. This marks the most severe oil supply disruption in the modern history of Russia, the second-largest oil exporter in the world.
As a result, the Brent crude price is currently hovering above the $115 per barrel mark, up 89% year-to-date and at its highest level since Russia invaded Ukraine in 2022.
That said, the soaring prices are providing a massive cash flow boost to Western oil producers, both big and small. According to the intelligence firm Rystad Energy, the US shale oil producers could earn an additional $63 billion in sales this year from the multi-year high in prices.
With that said, here are the Best Oil and Gas Penny Stocks to Buy in 2026.
Our Methodology
To collect data for this article, we used our stock screeners to identify oil and gas stocks with a price per share of less than $5. Then we ranked these stocks by the number of hedge funds invested in them at the end of Q4 2025, as per the Insider Monkey database. The following are the Best Oil and Gas Penny 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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
8. U.S. Energy Corp. (NASDAQ:USEG)
Number of Hedge Fund Holders: 1
U.S. Energy Corp. (NASDAQ:USEG) is a growth-focused energy company engaged in operating a portfolio of high-quality producing assets.
U.S. Energy Corp. (NASDAQ:USEG) announced on March 18 that it had reached a Final Investment Decision (FID) for the construction of its processing facility at the Big Sky Carbon Hub in Montana. The company also revealed that it had signed an Engineering, Procurement, and Construction agreement with CANUSA EPC.
The facility is designed for approximately 8 MMcf/d of inlet capacity, with a target to produce around 12 MMcf of helium and 125,000 metric tons of refined CO₂ annually at initial operations. The company expects to qualify for approximately $85/metric ton in Section 45Q federal tax credits, supporting an estimated $130 million in Phase 1 tax credit value.
U.S. Energy Corp. (NASDAQ:USEG) expects to commence gathering pipeline installation in the spring of this year, with commissioning targeted in the third quarter. The company then expects to initiate helium sales and carbon management operations in the first quarter of 2027.
Ryan Smith, President and CEO of U.S. Energy Corp. (NASDAQ:USEG), commented:
“Today’s announcements represent the culmination of 18 months of deliberate, disciplined execution, and the beginning of what we believe will be a transformational chapter for U.S. Energy. We have reached FID, signed our EPC contract with CANUSA EPC, and construction is underway at Big Sky. Our recent successful capital markets activity has pulled forward both the timeline and certainty of construction, and today we are putting that capital to work. CANUSA EPC brings precisely the construction and execution expertise required to deliver a complex, integrated industrial gas and carbon management facility on time and on budget. With three producing wells online, final engineering complete, a purpose-built plant site secured, and EPA MRV applications submitted, every element of a de-risked project is in place.
As global helium markets continue to tighten amid ongoing supply disruptions and increasing geopolitical uncertainty, we believe Big Sky is uniquely positioned to provide a secure, domestic source of this critical gas alongside its broader industrial gas and carbon management capabilities. We expect the market to increasingly recognize the differentiated, multi-revenue nature of this platform as we move through construction and toward cash flow generation at Big Sky in early 2027.”
7. Empire Petroleum Corporation (NYSEAMERICAN:EP)
Number of Hedge Fund Holders: 1
Empire Petroleum Corporation (NYSE:EP) is a conventional oil and natural gas producer with a main focus in the US onshore.
Empire Petroleum Corporation (NYSE:EP) announced on March 18 that it had elected to participate in a new oil and natural gas development program in Louisiana, indicating a meaningful addition to the company’s ongoing development activities.
While the three-well program targets hydrocarbon-bearing formations, the actual oil-to-gas mix will be confirmed through ongoing development. Empire’s working interest in the initial well will be 25%, with the company funding its portion of drilling and completion costs through the issuance of approximately 700,000 shares of its common stock.
Based on initial subsurface data, the well demonstrated a strong hydrocarbon flare while holding over 9,100 psi of back pressure with 16.5+ lb/gal drilling mud. The completion operations on the initial well are expected to begin next month, with initial production testing to follow.
Mike Morrisett, President and CEO of Empire Petroleum Corporation (NYSE:EP), stated:
“This opportunity aligns with the kind of development work that complements our existing operations. We appreciate the comprehensive technical work completed to date and look forward to participating in the next phase of this development. This participation also opens the opportunity to evaluate potential future midstream-adjacent opportunities that could, over time, provide stable and recurring cash flow.”
