Forget Exxon. The Smartest Oil Trade in 2026 Is the Company That Owns the Ground Beneath It

2 hours ago 3

Omor Ibne Ehsan

Wed, April 15, 2026 astatine 12:47 PM CDT 6 min read

Iran’s closure of the Strait of Hormuz has sent crude prices soaring, but portion astir investors reflexively bargain integrated lipid majors similar Exxon oregon Chevron, Texas Pacific Land (TPL) offers a purer play connected the lipid rally.
Texas Pacific Land generates royalties astatine ~71% operating margins by letting third-party operators bash the drilling portion TPL simply collects checks, meaning erstwhile WTI doubled, astir each the upside flowed straight to shareholders with nary superior expenditure obligations to dilute the gains similar accepted producers face.
Beyond commodity upside, TPL is actively expanding into produced h2o desalination (with a patent-pending exertion targeting 100,000 bbl/d capableness by 2027) and information halfway infrastructure connected its West Texas land, but the stock’s 60x trailing P/E and zero-hedge operation mean a swift lipid terms retreat could reverse the gains conscionable arsenic fast.
The expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks. Get them present FREE.

Since Iran closed the Strait of Hormuz connected February 28, 2026, the planetary lipid marketplace has been volatile. U.S. and Israeli strikes connected Iranian vigor infrastructure sent crude prices surging done March. A ceasefire concisely knocked Brent beneath $100, past Pakistan-brokered talks collapsed aft 21 hours of negotiations. President Trump announced a naval blockade of the strait. As of Tuesday, U.S. officials are signaling a 2nd circular of talks with Iran could hap earlier the ceasefire expires connected April 21. Oil is pulling backmost connected renewed diplomacy hopes. The ceasefire technically holds, but the strait remains efficaciously shut, and the structural proviso daze that began successful precocious February has not resolved.

For investors positioning astir this, the instinct is often to bargain Exxon oregon Chevron. One sanction that stands retired successful this situation is Texas Pacific Land (NYSE:TPL).

READ: The expert who called NVIDIA successful 2010 just named his apical 10 AI stocks

Texas Pacific Land owns the crushed itself, not the lipid beneath it. TPL holds ~882,000 acres of onshore concentrated successful the Permian Basin and collects royalties from each barrel, each cubic ft of gas, and each tube of produced h2o that passes done its land. Third-party operators bash the drilling. TPL collects a check.

In Q4 2025, TPL generated income from 4 sources:

Oil and Gas Royalties: $96.72 cardinal successful Q4 2025, driven by grounds quarterly accumulation of 37,500 Boe/d.
Water Sales: $60.73 cardinal successful Q4 2025, with grounds volumes of 1.0 cardinal barrels per day. The Delaware Basin produces ~4 barrels of h2o for each tube of oil.
Produced Water Royalties: $33.5 cardinal successful Q4 2025, increasing 25% twelvemonth implicit twelvemonth for full-year 2025.
Easements and Surface Income: $20.61 cardinal successful Q4 2025, covering pipelines, wellbore access, and information halfway infrastructure.