The ongoing military conflict with Iran, specifically as it relates to the Strait of Hormuz, has disrupted the global energy industry. Oil prices have surged in recent weeks, up nearly double from just a few months ago.
Amid all the uncertainty, Energy Transfer (NYSE: ET) stock is trading up 14% in 2026. The leading pipeline company plays a crucial role in transporting oil and gas throughout the United States.
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But should investors buy Energy Transfer right now? Here is what you need to know.
Energy stocks are getting hot because higher commodity prices mean companies can make more money when selling oil and gas. However, Energy Transfer is a pipeline business; it generates approximately 90% of its earnings before interest, taxes, depreciation, and amortization (EBITDA) from fees for transport and storage, and only 5% to 10% from commodities.
There could be some eventual volume tailwinds if the conflict lasts long enough to boost production from exploration companies that Energy Transfer works with, but that would likely be a lagging effect. For now, investors probably don’t want to put too much weight on the recent volatility as justification for buying the stock.
If you’re investing for income, Energy Transfer should jump off the page. Energy Transfer is a master limited partnership (MLP), a specialized business structure that passes all of its profits, losses, and depreciation deductions to its partners (investors). That requires a K-1 form each year as part of your personal tax filing.
Many MLPs pay large distributions (dividends), which explains Energy Transfer’s massive 7.1% yield. Ironically, a high yield is often the market’s way of pointing out red flags in a company, but Energy Transfer is on solid footing. The company generated $8.36 billion in distributable cash flow in 2025, nearly twice the $4.38 billion it distributed to partners.
Outside of Energy Transfer cutting its dividend during the pandemic, a historically turbulent time for the energy industry, the company has done a good job of increasing the distribution over time.
Data by YCharts.
Investors who reinvest the distribution can build a massive snowball of passive income over a decade or two.
Yes, if you’re a long-term investor, buying a stock now is really about what you think the business can do years from now. Energy Transfer is a key cog in the U.S. energy landscape, and that’s a good spot to be in. Energy demand is soaring from both exports and from data center activity for artificial intelligence and cloud computing.