<div id="readability-page-1" class="page"><div> <h2>Key Points</h2><ul><li>The geopolitical conflict unfolding in the Middle East has disrupted the global energy market.</li><li>Shell and BP both have exposure to the region.</li><li>BP is more highly leveraged and has been dealing with leadership issues.</li><li>10 stocks we like better than BP ›</li></ul>Shell (NYSE: SHEL) and BP (NYSE: BP) are two of the world's largest integrated energy companies. They have globally diversified portfolios, and their businesses span the entire energy value chain. Diversification is a good thing, but right now there's a complication because of the geopolitical conflict in the Middle East. On the positive side, the Middle East conflict has driven up oil prices. On the negative side, the industry's operations in the region have been disrupted. Both Shell and BP have operations in the region. How should investors think about these two stocks in light of the ongoing conflict?Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NzczOS8yNV8wMl8wOC1yb3VnaG5lY2tzLWF0LXdvcmstX21mLWRsb2FkLTEyMDF4Nzk4LTM2YjdhMmUuanBnJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="465" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NzczOS8yNV8wMl8wOC1yb3VnaG5lY2tzLWF0LXdvcmstX21mLWRsb2FkLTEyMDF4Nzk4LTM2YjdhMmUuanBnJnc9NzAw"/>Image source: Getty Images. <h2>The best play is to play it safe</h2>If you are worried about the conflict in the Middle East, you can avoid it almost entirely if you buy a company that has no exposure to the region. For example, Devon Energy (NYSE: DVN) is a U.S.-based oil producer. Its production isn't affected by the conflict, but it still benefits from high oil prices. Or you could sidestep oil prices altogether with a fee-based midstream business, like Enterprise Products Partners (NYSE: EPD). Enterprise gets paid based on the volume moving through its energy infrastructure system, with volumes hitting record levels in the first quarter of 2026.That said, integrated energy companies like BP and Shell are an attractive way to gain broad exposure to the global energy market. That remains true despite the disruptions in the Middle East. For long-term investors, integrated energy companies are a good investment choice in the energy sector. And Shell and BP offer attractive dividend yields of 3.4% and 4.6%, respectively. <h2>What about the conflict in the Middle East?</h2>Both companies will be impacted by the Middle East conflict. Roughly 22% of BP's production is in the region, according to Reuters research. Shell, by contrast, generates around 20% of its production from the region. Some of Shell's assets have sustained damage during the conflict.Exposure, however, is just one way to look at the issue. A better question might be which of these European energy giants can withstand the adversity they may face due to the conflict. The answer there is almost certainly Shell, which has a much stronger balance sheet. BP's debt-to-equity ratio is a worryingly high 1.3x, well above its peers'. Shell's ratio is a far more reasonable 0.4x.It seems as if the market isn't recognizing this fact, however, because BP's stock is up 22% so far in 2026, as of this writing, while Shell's stock has risen 15%. Recent corporate changes at BP, meanwhile, raise another concern. The company has had three CEOs in as many years and has just pushed its Chairman out due to governance concerns. In other words, the highly leveraged company is taking on a material geopolitical event while its leadership is in flux. That's not ideal.<h2>BP will survive, but Shell is probably preferable</h2>BP will easily survive the conflict in the Middle East, and so will Shell. If you think short-term, BP appears less affected right now, highlighting the damage to Shell's investments in the region. That could make BP a better option. However, rapid management changes and high leverage are issues that shouldn't be ignored. Shell's financial strength, meanwhile, means it should be able to both weather the conflict and what lies beyond it in relative stride. That could actually make it a better option today, given that its stock hasn't risen as much as BP's. The seven percentage point advantage BP has doesn't look huge, but it is a 45% performance difference. That gap could easily close if Shell's stock advances or BP's stock declines. That said, if you are looking to limit your exposure to the geopolitical conflict in the Middle East, the best bet could actually be a U.S. driller like Devon or a midstream operator like Enterprise. Neither one has exposure to the Middle East, and Enterprise's business isn't driven by energy prices.<h2>Should you buy stock in BP right now?</h2> Before you buy stock in BP, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,852!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,317,207!* Now, it’s worth noting Stock Advisor’s total average return is 984% — a market-crushing outperformance compared to 210% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 27, 2026. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends BP and Enterprise Products Partners. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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The ongoing geopolitical conflict in the Middle East is impacting the global energy market, affecting major companies like Shell and BP. While BP has higher leverage and leadership issues, Shell boasts a stronger balance sheet. Both companies have significant production in the region, but Shell is seen as the more resilient option. For investors seeking to avoid Middle Eastern exposure, alternatives like Devon Energy and Enterprise Products Partners are recommended. Despite BP's recent stock performance, analysts suggest considering other stocks for better investment opportunities.

Shell vs. BP: Better Oil Stock for the Iran War?