Oil and gas stocks to buy now are those that have prepared for leaner times ahead.

Companies in this sector see their fortunes wax and wane with the economy in normal times. That’s because as the primary suppliers of energy to the largest countries around the world, they ride high when there’s a lot of energy-consuming activity. The war in Ukraine has cut global oil supplies significantly, which has kept a floor under prices and beefed up bottom lines.

However as a looming recession threatens to trim demand expectations in the year ahead, it’s time to asses who used the past few years of gluttony wisely. While many of the oil majors carved out a chunk of their excess profits to reward shareholders, a fair bit of investment went on as well. The type of investment is a key differentiator between the winners and losers over the next 10 to 20 years.

Climate change is dominating the agenda in most major economies around the world. If we continue to march toward net zero, oil and gas firms that haven’t started to think about cleaner energy will be left with stranded assets. On the flip side, the unproven nature of renewables means those that are spending big could be left out in the cold if oil and gas usage has a longer tail than expected.

With that in mind, much of your decision on the best oil and gas stocks to buy comes down to your forecast for the energy transition.

Here’s a look at three candidates of varying shades of green (for an oil company, that is).

TotalEnergies (TTE)

French oil major TotalEnergies (NYSE:TTE) is the greenest option on this list of the best oil stocks to buy. A quarter of its investment spending went toward renewables and electricity in 2021 and the group expects over 30% of its budget to be devoted to decarbonized energy moving forward. One of its key aims is to become one of the top five global solar and wind electricity producers by 2030. To get there, the group expects to see petroleum products shrink from 44% of the current sales mix to 30% in 2030. At the same time, TotalEnergies plans to grow biofuel and electricity from 9% of revenue to 20%. 

Current conditions have been a real boon in supporting those ambitions. And although we’ve seen things slow recently, management expects prices to remain around $80 per barrel this year. The group breaks even at $25 per barrel, leaving plenty of wiggle room to support the core fossil fuel business while funneling money in to its clean energy future. The group’s been using some of the excess cash to pay down debt, leaving the debt to equity ratio at a comfortable 0.5x. The rest was paid back to shareholders by way of dividends and buybacks, something that’s likely to be repeated barring any major swings in oil prices.

BP (BP)

It’s difficult to talk about the best oil stocks to buy without mentioning BP (NYSE:BP). The British oil and gas major has benefitted just like its peers from a buoyant environment which has so-far supported its clean energy ambitions. Management’s been working to grow its exposure to renewable and low carbon energy, but for now, that part of the business isn’t delivering much to the bottom line.

It’s oil and gas that are funding the group’s expansion plans and until recently, the group was aiming to wean off its reliance on this core part of the business. However the most recent update saw BP cut back its emissions reduction target, saying higher production levels are necessary to support its transition plans.

That make BP somewhat of a middle ground for investors who think there’s a transition on the horizon but don’t want to put all their eggs in one basket. BP also trades on a much lower multiple than its U.S. counterparts, making it worth considering for long-term value investors. 

Chevron (CVX)

Of all the best oil stocks to buy, there’s one that offers a pure play on the industry without any added exposure to clean energy. Chevron boasts the lightest shade of green on this list, but it’s not necessarily destined for the ethical waste bin. The group’s one of the world’s largest liquid natural gas (LNG) suppliers. Importantly, LNG is still a fossil fuel, but it’s considered an important transition source of energy because it’s a little cleaner than oil. That means that even as the black stuff is phased out, Chevron’s LNG portfolio will likely continue to thrive well into the future. 

Chevron’s breakeven price is around $50 per barrel, somewhat higher than others on this list, but that’s still well below forecasts for prices to continue hovering around $80. What sets Chevron apart is management’s restraint. Unlike some peers who are rushing to elbow their way into a seat at the renewable energy table, Chevron’s said it prefers to take a “wait and see” approach. That could prove to be a strong strategy if the current energy security crisis derails net-zero plans.

In any case, Chevron’s patience means there’s a lot of extra cash floating around and management’s not been shy about sending it back to investors. It’s considered a Dividend Aristocrat, meaning it’s raised its dividend every year for at least the past 25. 

On the date of publication, Marie Brodbeck did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.