Mizuho Picks Top U.S. Oil & Gas Stocks as Middle East Tensions Persist

Mizuho has singled out its preferred U.S. oil and gas sector names as Middle East disruptions continue to reshape market expectations for 2026. The firm now projects Brent and WTI crude at $73.25 and $68.25 per barrel for next year, respectively, up from earlier forecasts, while keeping its mid-cycle view at $75 and $70 per barrel.

The continuing Iran War has tightened the projected 2026 oil supply-demand balance, accelerating Mizuho's expectation that prices will recover toward mid-cycle levels by year-end 2026. In this environment, Mizuho is concentrating on oil-levered exploration and production companies whose value is not fully recognized. The S&P 500 Energy sector index climbed roughly 2.5% week over week, outperforming the broader S&P by 2.4 percentage points, and has beaten the overall market by 29.2% year to date.

1. EQT Corporation (EQT) — Mizuho's top sector pick stands to gain from the firm's positive outlook on U.S. oil and gas. The company is well positioned to benefit from the tightening oil balance caused by Middle East disruptions. Mizuho sees overlooked value in the stock as crude markets factor in the ongoing Iran War and its effects on global supply dynamics.

In its latest update, EQT posted second-quarter revenue of $1.81 billion, slightly exceeding forecasts. Moreover, S&P Global Ratings revised its rating outlook on the company to positive from stable, attributing the decision to significant debt reduction.

2. Devon Energy Corporation (DVN) — Devon takes the second spot among Mizuho's preferred oil-levered exploration and production companies. The firm pointed out that U.S. refining was the energy sector's strongest performer, rising about 5.0% week over week, while Canadian exploration and production names lagged with weekly gains of just 0.5%.

Devon is favored for its leverage to improving oil market fundamentals, as Middle East tensions support expectations for higher prices. Devon Energy's second-quarter 2026 results surpassed analyst projections on both earnings and revenue, and the company raised its quarterly dividend by 33%.

3. Permian Resources Corporation (PR) — Mizuho's third pick reflects its view that the risk of Brent crude falling into the low-$50s range—the consensus scenario heading into 2026—has diminished considerably. The firm contends that structurally higher long-term oil prices in the $80-85 per barrel range are well supported. In natural gas, Mizuho trimmed its 2026 Henry Hub forecast to $4.25 per mmbtu, despite constructive fundamentals from LNG and power demand growth, citing recent price trends and a modestly smaller inventory shortfall.

Permian Resources delivered better-than-anticipated second-quarter results, beating Wall Street estimates on both earnings and revenue. The company also achieved record free cash flow and lifted its full-year 2026 oil production guidance.

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