Berkshire Hathaway (BRK.B), led by legendary investor Warren Buffett, has built up a position of over 28% of Occidental Petroleum’s (OXY) outstanding shares. This level of commitment shows real confidence in OXY’s future.

This confidence from Buffett in Occidental Petroleum comes as the International Energy Agency has revised down its global oil (CLN25) demand growth forecast for 2025 to 730,000 barrels per day, citing escalating trade tensions and a weaker economic outlook. 

Yet, even with softer demand growth and volatile pricing, steady underlying consumption helps explain why OXY’s moves and Buffett's backing matter right now.

OXY’s careful financial management, improvements in how it runs its business, and the clear support from insiders make it more than just a Buffett pick. For investors looking for value and stability in a tough market, OXY stands out as a company worth watching. Let’s take a look.

OXY’s Financial Pulse in 2025

Occidental Petroleum (OXY) is one of the largest players in the U.S. energy industry, focusing on oil and gas (NGN25) exploration and production as well as chemicals. 

Yet, OXY stock has had a rough year. Over the past 52 weeks, shares have dropped by 24%, and so far this year, they’re down 7.9%. Even with these declines, the company’s latest financial results show it’s holding up well. 

In the first quarter of 2025, Occidental posted $2.1 billion in operating cash flow and $1.2 billion in free cash flow before working capital. The company brought in $1.3 billion from asset sales, which helped pay down $2.3 billion in debt this year. This shows OXY is serious about keeping its finances in check. Production stayed strong at 1,391 Mboed, and both the midstream and chemicals divisions did better than expected.

Looking at valuation, OXY trades at a forward price-earnings ratio of 20.3x, which is higher than the sector average of 12.82x. With a market cap of $45.7 billion and a 60-month beta of 0.87x, the stock offers both size and a bit more stability than some of its peers.

What Sets Occidental Apart in a Competitive Market

What really makes Occidental stand out is its strong position in the Permian Basin, which is the main area for U.S. shale oil. After buying CrownRock L.P., Occidental now controls 1.5 million acres of unconventional land and 1.4 million acres of conventional land in the region. In 2025, about 55% of the company’s total output is expected to come from the Permian. 

This isn’t by chance. Occidental has worked hard to be more efficient, cutting capital spending by $100 million this year while still planning to invest between $3.5 billion and $3.7 billion to keep improving and expanding its operations. 

The company is also getting faster and cheaper at drilling, expecting to cut drilling time per well and lower average well costs. Thanks to these efforts, Occidental has already brought 125 wells online in the first quarter and aims to drill up to 565 wells by the end of the year. The company has enough high-return projects in the Permian to last for the next decade.

All of this steady production and efficiency help support Occidental’s dividend. The current yield is 2.12%, with a payout ratio of just 30.4%, and the company has raised its dividend for five years in a row. There is still room for the dividend to grow as the company continues to perform well.

Analyst Sentiment and What Lies Ahead for OXY

Occidental Petroleum’s outlook for 2025 shows a company making careful moves and adjusting to a tougher market. Recently, OXY lowered its capital spending plans for the year by $200 million and cut its domestic operating costs forecast by $150 million. 

Analysts expect second-quarter earnings per share of $0.38, down from $1.03 last year, with full-year estimates at $2.21 for 2025 and $2.52 for 2026. While these numbers are lower than before, projected 14% growth in 2026 hints at a possible turnaround.

Most analysts agree, with all 23 surveyed rating OXY a consensus “Hold.” The average price target is $48.21, which is marginally higher than its current trading price. 

Insider buying adds another layer of confidence. Over the past year, insiders picked up 12.6 million shares as tracked by Barchart, and there have been no insider sales. Warren Buffett’s Berkshire Hathaway also increased its stake by more than 763,000 shares in February 2025, making OXY the sixth-largest holding in Berkshire’s portfolio with total holdings of nearly 265 million shares. 

Conclusion 

At the end of the day, Occidental’s blend of operational muscle in the Permian, disciplined financial moves, and a shareholder-friendly dividend policy makes it easy to see why Warren Buffett and company insiders keep piling in. Even with recent stock volatility, the fundamentals are hard to ignore. For investors looking for a cheap energy play with heavyweight backing and a clear path for future growth, OXY stands out as a name worth watching, especially when the smart money is already on board.