Goldman Sachs Names Top Oil Stocks to Watch as Middle East Conflict Drives Crude Higher

TLDR

• Goldman Sachs has named five oil producers and three refiners as top picks following Middle East disruptions
• Brent crude has surged 56.3% over the past month to $106.91 a barrel
• ConocoPhillips is projected to deliver 20-25% free cash flow per share CAGR from 2025-2030
• Valero, HF Sinclair, and Marathon Petroleum are Goldman’s top refiner picks, all rated Buy
• Valero shares are up 49.6% year-to-date, Marathon up 45.7%, and HF Sinclair up 32.6%

Goldman Sachs has named eight oil stocks across producers and refiners as top sector picks, following ongoing Middle East conflicts and supply disruptions that have sent crude prices sharply higher.

Brent crude has risen 56.3% over the past month to $106.91 a barrel. Red Sea shipping attacks have pushed the U.S. and Europe to tap strategic reserves to help stabilize global crude prices.

Goldman’s analyst Neil Mehta issued Buy ratings on all three refiner picks: Valero Energy, HF Sinclair, and Marathon Petroleum.

Among producers, Goldman sees favorable risk-reward at $70-$75 per barrel Brent. The bank raised price targets across its U.S. Majors and Canadian Oils coverage.

ConocoPhillips is Goldman’s standout producer pick. The bank projects 20-25% free cash flow per share compound annual growth from 2025 to 2030, driven by four major projects including Willow and Port Arthur. Goldman estimates roughly $9 billion in incremental free cash flow by 2030.

ConocoPhillips, COP

Chevron is also on the list, with Goldman projecting at least $12 billion in share repurchases in 2026. Upcoming project start-ups in Guyana and the Gulf of America are expected to support growth.

Refiners Benefit from Tighter Margins and Rising Demand

On the refining side, Goldman favors companies with improving margins, particularly on the West Coast where crack spreads have risen due to tighter product inventories and strong gasoline demand.

Valero Energy leads the refiner picks. Goldman praised its Gulf Coast refineries, which process at least 240,000 barrels per day of Venezuelan crude. Valero posted Q4 earnings of $3.82 per share on $30.37 billion in revenue. The company plans to return 40-50% of adjusted cash flow through dividends and buybacks, with Goldman expecting around $4.9 billion returned in 2026.

HF Sinclair remains a Goldman top pick despite recent management changes. The company recently started a $55 million upgrade at its El Dorado plant, expected to add 10,000 barrels per day of heavy crude processing. Goldman says the stock is undervalued.

Marathon Petroleum rounds out the refiner picks. Goldman expects $4.6 billion returned to shareholders in 2026. Marathon reported Q4 earnings of $4.07 per share, beating forecasts. The company is targeting 12.5% dividend growth over two years.

Canadian Producers Also in Focus

Among Canadian names, Cenovus Energy holds the highest total return potential according to Goldman, with first oil from West White Rose expected at the end of Q2 2026.

Suncor Energy has returned approximately 65% over the past year. Goldman remains positive, citing its integrated business model and autonomous haul truck deployment to cut costs.

Canadian Natural Resources offers a dividend yield around 4%. Goldman estimates full-year production of approximately 1,632 thousand barrels of oil equivalent per day.

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