Richard Cox writes: As most investors know, the seemingly constant threat of conflict in the Middle East has the ability to create drastic volatility in oil. The most recent example of this has been seen in Syria, which only accounts for 0.5% of world oil production (500,000 barrels per day). But the possibility of a disruptive chain reaction has been enough to put markets on edge and bring increased volatility to oil and most energy-related assets. Syria’s close ties with Iran, the possibility of a civil war in Iraq, and near-constant turmoil in Egypt mean that economic sanctions could be seen at any time.

“If this occurred,” said Sandip Sekhon, markets analyst at AlphaForecast.com, “the impact would be much more significant as these regions account for a larger percentage of daily oil production -- 3.5 million barrels.” For investors with a lower risk tolerance, it makes sense to take positions in assets that are able perform in a stable fashion in either scenario (heightened conflict or relative peace). Those looking to gain exposure to oil might see this as a near impossibility but there are stocks that are largely sheltered from the volatile political environment in the Middle East. Here are two strong selections that are also accompanied by hefty dividends, making these stocks able to generate gains even if oil prices were to take a tumble from their elevated levels.

Alternatives in the Oil Space

First, we look at French company Total (TOT), which is the fifth-largest publicly traded oil and gas producer in the world. Market valuations for this stock tend to trade in-line with the dominant trends seen in oil prices, so it is not surprising that the stock has more higher by more than 10% year-to-date. Recent agreements with China Petroleum to develop resource sites in Tajikistan put the company in a better position to capitalize on rising demand in Asia’s emerging economies. By 2020, Chinese oil imports are expected to rise above $500 billion annually, which would make it the world’s largest market. Total’s diversified portfolio includes resources in Australia and Africa, along with its recent purchases in Egypt.

But the company’s total exposure to volatile regions is relatively insignificant at around 8%, and when we consider the strong dividend yield (nearly 5.5%), the company is a good candidate for gaining protected exposure to oil markets. Total is one of the industry leaders in extracting oil cheaply and commanding high prices for its products, which is reflected in last year’s 8% sales growth ($266 billion in 2012) and 2.4% rise in operating income. Total expects to see annual production to increase by 3% until 2015, and output levels to reach 3 million barrels per day by 2017.

Next, we look at Enerplus (ERF), which is the biggest North American oil and natural gas income fund. Based in Calgary, Enerplus invests in mature development properties in Western Canada and has seen sharp rallies since hitting its lows in April. This puts the company in a strong position as one of the biggest sources of U.S. oil imports. In 2012, 2.8 million barrels of Canadian oil were shipped to the U.S., which was roughly twice the amount exported by Saudi Arabia. The company’s earnings report for the second quarter showed that annualized production levels grew by 10%, putting the company on a solid path to to hit stock valuations above $20 before the end of the year. This, along with its excellent dividend yield (nearly 6.4%), make the stock a great way of gaining oil exposure without the added risk of further turmoil in the Middle East.

Richard Cox is a university teacher in international trade and finance. Lessons in macroeconomics and price behavior in equity markets. He writes for MarketBulls.net, BinaryOptionShark.com,TheStreet, Seeking Alpha, and the Motley Fool.Investing strategies in these articles are based on technical and fundamental analysis of all the major asset classes (stock indices, currencies, and commodities). Trade ideas are generally suggestive of time horizons of one to six months.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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