Occidental Petroleum Corporation

Diversified upstream E&P stocks delivered a strong second quarter, with the five companies tracked beating analysts' consensus revenue estimates by 9.7% as a group. ExxonMobil reported revenues of $116 billion, up 42.3% year over year and 6.8% above expectations, while Occidental Petroleum posted the biggest beat at 15.3% with revenues of $8.33 billion, up 57.1%. Chevron's revenues of $70.06 billion rose 56.3% and beat by 6.2%, Devon Energy's $6.89 billion was up 67.4% and beat by 10.3%, and ConocoPhillips' $19.52 billion rose 32.4% and beat by 9.6%. Share prices for the group have risen 10.9% on average since the latest earnings results.

Occidental Petroleum, a key holding of Berkshire Hathaway, has raised its dividend following strong sector performance and healthy cash flow. The increase is supported by roughly US$3b in free cash flow and recent debt reduction, keeping the payout ratio anchored in operational cash generation. Berkshire Hathaway continues to hold a significant stake in Occidental, and the dividend move highlights how Occidental is allocating capital between shareholder returns and other uses such as investment and debt management. The key open question remains how stable Occidental's dividend will be through a weaker commodity cycle.

Occidental Petroleum reported second-quarter 2026 adjusted earnings of $2.40 per share and announced a strategic plan to generate $4 billion in annual sustainable cash flow by 2030. The company's net sales reached $8.1 billion, driven by $6.9 billion in oil and gas sales and $1.3 billion from midstream and marketing, while free cash flow hit $3.0 billion, the highest quarterly level since the third quarter of 2022. Global production averaged 1.433 million barrels of oil equivalent per day, exceeding the high end of management guidance by 23,000 barrels per day, with Permian production at 804,000 barrels per day and Gulf of America production at 144,000 barrels per day. Principal debt was reduced by $1.5 billion to $11.8 billion, and the Board approved an 8% increase in the quarterly dividend to $0.28 per share. Management stated that approximately 85% of the planned cash flow improvements are expected to be achievable even at lower commodity prices, and the company maintained its full-year capital guidance of $5.5 billion to $5.9 billion.

Shares of NESR, Murphy Oil, ProPetro, Occidental Petroleum, and Diamondback Energy traded up after Brent crude rebounded to the mid-$80s, as traders kept a geopolitical risk premium priced into oil despite ongoing Strait of Hormuz negotiations. NESR jumped 17.6%, ProPetro gained 6%, Murphy Oil rose 4.6%, Diamondback Energy added 3.8%, and Occidental Petroleum climbed 3.5%. The move followed a UAE-vessel incident that reversed an earlier price drop, while Kpler data showed shipping traffic through the Strait of Hormuz plummeted about 33% over the previous two days. Iran's Parliament also reviewed a bill that would permanently ban U.S., Israeli, and other hostile vessels from the waterway and impose heavy cargo fines, signaling the restriction could become more formal. The re-pricing reflects supply-shock risk rather than a multi-year demand boom, with the next confirmation coming from daily tanker-crossing data, further incidents, and whether Brent holds above the levels set by this weekend's risk spike.

Occidental Petroleum shares have surged nearly 36% since Greg Abel became CEO of Berkshire Hathaway in January, outperforming the S&P 500's 14% gain and Chevron's 22.5% rise. The rally was fueled by an escalation in the U.S.-Iran conflict that drove crude prices higher, with Occidental's latest quarterly results showing revenue up 57% year-over-year and earnings rising 20-fold. However, further gains depend heavily on a resurgence in oil prices, making Occidental a more binary bet than Chevron, which has a bull case built on Brent crude prices lower than current levels. Occidental has become a pure play on fossil fuel prices after selling OxyChem to Berkshire for $9.7 billion and reducing debt by $6.5 billion. Abel appears content to hold both Occidental and Chevron for now, but changes to Berkshire's portfolio allocations remain possible.

All 12 S&P 500 energy companies that reported earnings this week beat Wall Street's EPS estimates, while nine topped revenue expectations and three missed. Occidental Petroleum posted EPS of $2.40, beating by $0.55, and revenue of $8.33 billion, exceeding forecasts by $1.08 billion. ConocoPhillips reported EPS of $3.24, a $0.30 beat, on revenue of $19.52 billion that missed estimates. Devon Energy delivered EPS of $1.57, beating by $0.16, with revenue of $7.42 billion surpassing expectations by $1.49 billion. ONEOK's EPS of $1.53 beat by $0.13 on revenue of $12.05 billion, a $3.10 billion beat, prompting raised full-year 2026 guidance. Phillips 66 posted EPS of $9.41, a $1.91 beat, on revenue of $52.04 billion, exceeding estimates by $8.00 billion. EOG Resources reported EPS of $5.07, beating by $0.10, with revenue of $8.62 billion topping expectations by $821.75 million. The sector's strong cash flows, disciplined spending, and shareholder returns continued to support performance, with the State Street Energy Select Sector SPDR ETF gaining 28.27% year-to-date, outpacing the broader S&P 500's 12.63% return.

Occidental Petroleum reported adjusted earnings of $2.40 per diluted share and generated approximately $3 billion in free cash flow in the second quarter of 2026, its highest level since the third quarter of 2022. Total production averaged 1.43 million barrels of oil equivalent per day, exceeding the midpoint of guidance by 23,000 barrels of oil equivalent per day, while domestic lease operating expense improved 6% versus guidance to $7.80 per barrel of oil equivalent. The company reduced principal debt to $11.8 billion, the lowest since the second quarter of 2019, and raised its quarterly dividend by 8% to $0.28 per share. Midstream and marketing adjusted earnings reached a quarterly record of approximately $960 million. Occidental also outlined a path to add over $4 billion in annual sustainable cash flow by 2030, with about 85% achievable even at lower oil prices, and maintained full-year capital guidance of $5.5 billion to $5.9 billion.

Berkshire Hathaway CEO Greg Abel has left the conglomerate's energy investments largely untouched while reshaping other parts of the stock portfolio, a move seen as a signal of long-term confidence in the sector. Abel trimmed the Apple stake, built a position in Alphabet, and closed out more than a dozen smaller holdings, but Chevron remains a top-five holding at roughly 7% of the equity portfolio and the large Occidental Petroleum stake has not been trimmed. The company also completed the purchase of Occidental's OxyChem business earlier this year, and wholly owned utility giant Berkshire Hathaway Energy, which Abel himself built, has been kept intact. Abel has noted that roughly half of Berkshire Hathaway Energy's businesses now serve AI-related power needs, suggesting the energy bets are a deliberate wager on surging electricity demand driven by artificial intelligence.

Berkshire Hathaway’s new CEO Greg Abel spent more on acquiring whole companies than on buying stocks in his first quarter at the helm. Abel sold 15 stock positions and added less than $3 billion in new stocks, excluding Alphabet shares, while spearheading the $6.8 billion acquisition of homebuilder Taylor Morrison in June. He also completed the $9.7 billion purchase of OxyChem from Occidental Petroleum in January, a deal initiated under Warren Buffett. Berkshire still holds close to $400 billion in cash, and Abel appears to favor deploying capital into wholly owned subsidiaries rather than portfolio investments.

U.S. stocks fell sharply, with the S&P 500 sliding to a one-month low and the Nasdaq 100 sinking to a three-month low, as chipmakers and AI infrastructure stocks sold off and crude oil prices surged more than 7%. The Philadelphia Semiconductor Index dropped over 3% to a two-and-a-half-month low, with Nebius Group down more than 9%, KLA Corp and Sandisk down more than 7%, and Applied Materials, NXP Semiconductors, and ARM Holdings down more than 5%. Crude oil jumped after the Islamic Revolutionary Guard Corps said it targeted a U.S. airbase in Jordan with ballistic missiles and claimed to have halted three tankers in the Strait of Hormuz, while the U.S. and Saudi Arabia launched a joint attack on Iran-aligned terrorists in Iraq. The Federal Reserve kept interest rates unchanged in a 9-3 decision, and markets awaited earnings from Microsoft and Meta Platforms after the close. The 10-year Treasury yield rose 4 basis points to 4.64%, and energy stocks gained, with Diamondback Energy up more than 4% and ConocoPhillips, APA Corp, Devon Energy, ExxonMobil, and Occidental Petroleum up more than 3%.

Occidental Petroleum and Energy Transfer present two distinct ways to invest in the energy sector during the second half of 2026. Occidental Petroleum is an upstream producer of oil and natural gas, with most of its operations based in the United States, making its financial results highly sensitive to volatile commodity prices. Energy Transfer is a midstream master limited partnership that owns energy infrastructure assets across North America and generates revenue primarily from fees based on transport volumes rather than commodity prices, targeting annual distribution growth of 3% to 5% and offering a 6.5% yield. The ongoing Middle East conflict has disrupted supply through the Strait of Hormuz, pushing energy prices higher and benefiting producers like Occidental, while Energy Transfer's performance depends more on sustained demand. Investors seeking aggressive growth from rising oil prices may favor Occidental, whereas those prioritizing income and lower commodity risk may prefer Energy Transfer.

Occidental Petroleum shares could rise at least 20% by the end of 2026 if WTI crude oil climbs back above $100 per barrel and stays there. The stock, which hit a 52-week high of $67.45 on March 31, now trades around $58 after oil retreated from a four-year high of $112.25 in May to about $92. Oxy generates most of its revenue from upstream operations, making it more sensitive to oil prices than diversified majors like Chevron, and its free cash flow grows rapidly above $60 per barrel. Even at a projected $70, the stock would trade at 18 times next year's earnings, leaving room for further gains if elevated prices attract more investors.

U.S. energy shares rose in premarket trading on Thursday after Houthi attacks on two Saudi oil tankers pushed Brent crude briefly to $100 a barrel, intensifying Middle East tensions and heightening concerns over global oil supply disruptions. Brent crude futures rose as much as 6.3% to $100 per barrel for the first time since May 26, while U.S. West Texas Intermediate crude was up 5.2% at $91.30 per barrel. Shares of Exxon Mobil and Chevron rose 1.6% and 1.7%, respectively, and Diamondback Energy, Devon Energy, ConocoPhillips, and Occidental Petroleum were up between 2% and 2.5%. Refiners Valero Energy, Marathon Petroleum, and Phillips 66 also gained between 2.1% and 2.6%. UBS analyst Giovanni Staunovo said the production recovery process in the Middle East is expected to be slower than the market anticipates, keeping the oil market tight and prices supported.

The global hydrochloric acid market is projected to grow from USD 2.76 billion in 2025 to USD 5.21 billion by 2035, at a compound annual growth rate of 6.03 percent, according to a report by SNS Insider. North America held the largest revenue share in 2025 at approximately 35.1 percent, with the United States contributing 87.4 percent of that regional total. The steel pickling application segment accounted for over 36.5 percent of the market in 2025, while the oil well acidizing segment was the fastest growing. Asia Pacific is expected to be the fastest-growing regional market, registering a nearly 6.4 percent CAGR from 2026 to 2035, driven by industrialization in China and India. Key players include Olin Corporation, Occidental Petroleum Corporation, Westlake Corporation, Dow Inc., and BASF SE.

Occidental Petroleum is targeting a $550 million reduction in capital spending this year, bringing total spending to between $5.5 billion and $5.9 billion. The company completed the $9.5 billion sale of its OxyChem business to Berkshire Hathaway in January, allowing it to prepay $6.7 billion in debt and eliminate $550 million in annual interest expenses. With crude prices up over 30% year to date, Occidental may face pressure to boost output, but analysts caution that geopolitical volatility and the risk of falling prices could punish any rush to lift production. Evercore ISI projects the company can grow free cash flow by 8% annually through 2030 with WTI at $75 per barrel and potentially restart share repurchases in two years, without materially increasing near-term output.

Occidental Petroleum shares have risen 14.1% in the past nine months, slightly ahead of the Zacks Oil and Gas-Integrated-United States industry's 13.8% gain. The company's acquisition of CrownRock L.P. has expanded its Permian Basin footprint, while a new oil discovery at the Bandit prospect in the Gulf of America is expected to support long-term production growth. Occidental projects second-quarter 2026 total output of 1,390-1,430 thousand barrels of oil equivalent per day, with Permian production of 783-803 Mboe/d. The company has reduced principal debt to $13.2 billion and aims to reach $10 billion, cutting annual interest expense by $830 million. However, the stock trades at a premium with a trailing 12-month EV/EBITDA of 5.9X versus the industry average of 5.03X, and its return on equity of 9.65% trails the industry's 10.94%, leading Zacks to rate it a Hold.

Berkshire Hathaway’s cash and short-term investments reached $397.4 billion as of March 31, 2026, nearly triple the $128.6 billion held at the end of 2022. The cash hoard has continued to swell as the company sells assets faster than it reinvests, with recent filings showing systematic reductions in Bank of America and a complete exit from Liberty Media positions, while new buying in Sirius XM and Occidental Petroleum has been narrower. Berkshire’s forward price-to-earnings ratio of 24 implies expected earnings compression, and analyst consensus price target of $520.33 offers less than 3% upside from the current share price of $507.78. The company pays no dividend, and with roughly a third of its $1.22 trillion balance sheet in cash equivalents, long-term investors face growing questions about future returns.

Occidental Petroleum shares rose 3.9% in Wednesday's trading as crude oil prices surged and Evercore ISI double-upgraded the stock to Outperform from Underperform, raising its price target to $65 from $58. Analyst Stephen Richardson cited a materially de-levered balance sheet and a structural step-up in capital efficiency that together reshape the free cash flow profile and the path back to shareholder returns. The upgrade is about the rate of change and a closing valuation discount, with the market under-crediting the durability of efficiency gains and the simplification of a capital structure that has long capped common-equity leverage to oil. Lower well costs and a strategically shallower base decline reduce maintenance capital over time, which flattens and lifts free cash flow and supports a restart of buybacks around the back half of 2028.

Wall Street analysts issued a flurry of rating changes and initiations on Wednesday, July 8, 2026. Among the notable upgrades, Evercore ISI raised Occidental Petroleum to Outperform from In Line and lifted its price target to $65 from $58, while Goldman Sachs upgraded Dollar Tree to Neutral from Sell with a $155 target. On the downgrade side, Morgan Stanley cut Alcoa to Equal Weight from Overweight and slashed its price target to $53 from $79, and Barclays downgraded HCA Healthcare to Equal Weight from Overweight, reducing its target to $179 from $238. In new coverage, Barclays initiated PayPal with an Underweight rating and a $42 target, while DA Davidson started Pinterest with a Buy rating and a $26 target.

Energy stocks rose in premarket trading Wednesday as U.S. oil prices surged after President Donald Trump said the ceasefire with Iran is over. Diamondback Energy jumped more than 3%, APA Corporation and Occidental Petroleum rose more than 2.5%, Chevron was up more than 2%, and Exxon Mobil rose 1.5%. In contrast, fuel-exposed companies fell, with Carnival Corporation off 3.5%, Norwegian Cruise Line down 3%, United Airlines falling 3%, and Delta Air Lines declining nearly 2%. SpaceX bucked the sell-off trend, rising just under 0.5% after a more than 6.5% decline on Tuesday that pushed the stock below its IPO first-trade price of $150. Memory stocks continued their sell-off, with Sandisk off more than 5.5%, Western Digital down 5%, Micron Technology declining 4.5%, and Seagate Technology lower by 3.5%. Bath & Body Works fell more than 4% after Goldman Sachs downgraded the stock to sell from neutral, citing potential cannibalization from third-party distribution. Estee Lauder declined 2% after disclosing estimated restructuring costs now total $1.75 billion, up from a previous estimate of $1.55 billion. Rivian Automotive was off nearly 4% following an 18% drop on Tuesday after announcing a public offering of 75 million shares.

Alibaba Group surged 10.4% in premarket trading as investors positioned ahead of its upcoming earnings report, buoyed by expectations of narrowing losses in its instant-commerce business and stable profitability. The broader market declined, with Dow futures down 1.04%, S&P 500 futures off 0.9%, and Nasdaq 100 futures sliding 1.1%, after President Trump cast doubt on an interim peace agreement with Iran. Occidental Petroleum climbed 3.8% following an Evercore ISI double upgrade to Outperform with a $65 price target, citing a stronger balance sheet and improved capital efficiency. Rivian Automotive fell 4.7% after pricing a 75 million-share public offering at $15.50 per share to raise approximately $1.2 billion for equity contributions tied to a Department of Energy loan agreement. Bath & Body Works slipped 4.1% after Goldman Sachs downgraded the retailer to Sell, pointing to weakening consumer sentiment and softer brand engagement among younger shoppers.

Occidental Petroleum shares rose 3.43% in premarket trading after Evercore upgraded the stock to Outperform from Underperform and raised its price target to $65 from $58. The firm cited a de-levered balance sheet and improved capital efficiency as reasons the stock can now better track commodity fundamentals. WTI futures jumped 5.93% after Donald Trump said the U.S.-Iran ceasefire is over, reviving supply-disruption fears and helping oil producers. OXY had fallen 12% over the prior month, compressing valuation and creating a high-beta setup for a sharp recovery. Evercore projects approximately 8% free cash flow per share compound annual growth rate through 2030, assuming flat $75 WTI and flat volumes, and expects OXY to restart buybacks in the back half of 2028.

US stock futures are mixed with S&P 500 contracts slightly in the red and Dow futures modestly higher as investors weigh climbing oil prices, rising UK government bond yields above 4.8%, and a 50% chance of a September US rate hike. The ISM Services PMI came in at 54.0, showing the economy still expanding while price pressures ease. Among top movers, Cloudflare jumped 8.60% after a Scotiabank upgrade, Venture Global surged 6.82%, and Occidental Petroleum climbed 5.88%, while Rivian Automotive fell 18.12% after completing a US$1.16 billion follow-on equity offering, Astera Labs declined 11.52%, and Rocket Lab dropped 10.40%. Earnings from PepsiCo and Delta Air Lines are on the radar for the next few sessions.

Occidental Petroleum ended 2025 with nearly 4.6 billion barrels of oil equivalent in proved reserves following the CrownRock acquisition, underscoring the depth of its resource portfolio. The company achieved an organic reserves replacement ratio of 107% in 2025 and a three-year average of 116%, demonstrating its ability to replenish produced volumes through disciplined development. Occidental's diversified asset base spans the Permian Basin, DJ Basin, Gulf of America, Oman, the UAE, Algeria and other regions, combining high-quality U.S. shale with long-lived international operations. Its return on invested capital of 4.03% exceeds the industry average of 3.88%, while the Zacks Consensus Estimate for 2026 and 2027 earnings per share has risen 31.65% and 25.74% respectively over the past 60 days. Shares have gained 18.6% in the past six months, outperforming the industry's 8.9% rally.

Occidental Petroleum received approval from Trinidad and Tobago to join ExxonMobil in an ultra-deepwater exploration block, with the government consenting to Oxy acquiring a 10% stake in Block TTUD-1 while ExxonMobil retains a 90% interest and the operator position. The approval highlights mutual dedication to regional cooperation on ecological events. Separately, Mizuho raised its target price on Occidental Petroleum from $72 to $75 and maintained an Outperform rating, citing expectations that the Iran crisis will keep oil prices and refining margins under pressure. Mizuho also increased its oil price outlook by 25% for 2026 and 6% for 2027, and raised U.S. refining crack projections by 61% and 51% for those years respectively.

Barclays upgraded Occidental Petroleum Corporation to Overweight from Equal Weight and raised its share price target to $72 from $59 on May 26th. The bank discussed Occidental Petroleum's debt in the context of soaring oil prices due to the Iran war, believing the prices could help the firm with its debt and fund Berkshire's equity obligations by 2027. Occidental Petroleum's shares are up 19% over the past year and 17% year-to-date. Berkshire Hathaway's latest stake in the company is worth $17.2 billion.

Occidental Petroleum holds an edge over Chevron based on stronger earnings estimate revisions, higher return on equity, cheaper valuation, and better recent share price performance, according to a Zacks Investment Research analysis. The Zacks Consensus Estimate for Occidental's 2026 and 2027 earnings per share has risen 27.53% and 26.92% over the past 60 days, compared with increases of 12.38% and 4.88% for Chevron. Occidental's return on equity stands at 9.65% versus Chevron's 6.9%, and its enterprise value to EBITDA multiple is 5.7 times, well below Chevron's 8.96 times. Occidental shares have gained 20.6% in the past six months, outpacing Chevron's 12.2% rally, though Chevron offers a higher dividend yield of 4.16% compared with Occidental's 2.08%. Both stocks carry a Zacks Rank #3, or Hold.