With Oil Prices Near Multiyear Highs, Is Chevron a Buy Right Now?

Brent crude oil prices aren’t too far away from the highest level over the last 10 years. It’s a similar story for West Texas Intermediate (WTI) oil prices. Anyone who has watched or read the news in recent weeks knows why: The conflict between the U.S./Israeli alliance and Iran has been the catalyst for skyrocketing oil prices.

Chevron (CVX 4.50%) has understandably been one of the biggest winners from the Middle East crisis. As the third-largest energy company in the world by market cap, Chevron’s shares tend to correlate closely with oil prices. But is the stock still a buy after its tremendous year-to-date gains?

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NYSE: CVX

Chevron

Today’s Change

(-4.50%) $-9.32

Current Price

$197.58

Key Data Points

Market Cap

$394B

Day’s Range

$194.91 - $204.64

52wk Range

$132.04 - $214.71

Volume

1.2M

Avg Vol

13M

Gross Margin

14.66%

Dividend Yield

3.50%

Much to like about Chevron

Make no mistake about it: Chevron is highly profitable with oil at over $100 per barrel. However, the company doesn’t need prices to be that high to still fully cover its dividends and capital expenditures. Chevron’s breakeven level is below $50 per barrel.

The great news for investors is that Chevron’s dividend payouts and capex are moving in opposite directions. Chevron recently increased its dividend for the 39th consecutive year. Meanwhile, the company lowered its capex guidance for 2026.

Chevron delivered $1.5 billion in cost reductions in 2025. It’s on track to reduce costs by another $3 billion to $4 billion this year. As a result, the company’s earnings continue to grow robustly. This trend is expected to continue. Chevron projects average annual earnings-per-share growth of at least 10%.

The energy giant expects to deliver the highest cash margins among its peer group over the next eight years. Chevron also projects significantly higher new project returns than the other major oil and gas companies through 2050.

Chevron now ranks as the leading producer of natural gas in the U.S. It’s also the leader in the Gulf of Mexico. The company is in the strongest position to capitalize on newly opened opportunities in Venezuela. Thanks to the acquisition of Hess, Chevron has massive oil production potential in Guyana.

Image source: Getty Images.

Is Chevron stock a buy right now?

Are there any negatives for Chevron? Sure. One is that its trailing 12-month price-to-earnings ratio has risen significantly along with its share price. Some investors could worry that the stock’s valuation now makes it less attractive.

If you’re looking to make a quick buck, Chevron could be a relatively risky bet. The conflict with Iran could be settled peacefully, leading to a tumble in oil prices and oil stocks.

On the other hand, if you’re a long-term investor, I think that Chevron is a solid pick. The company is among the elite in the energy sector. The supply and-demand dynamics for oil and gas work to Chevron’s advantage over the next few decades. Crisis or no crisis, this stock is worthy of investors’ attention.