Occidental Petroleum Rides Boom Times Under Greg Abel at Berkshire Hathaway

Greg Abel's leadership at Berkshire Hathaway has been making headlines, but a lesser-known development is Occidental Petroleum's (OXY) strong performance. Since January, Oxy shares have surged by nearly 36%, outperforming major indexes like the S&P 500 and other major oil stocks, including Chevron (CVX), which is up around 22.5%. This growth can be attributed to the escalation of the U.S.-Iran conflict earlier this year, which led to a sudden surge in crude oil prices.

Occidental's latest results show why investors were primed to bid it up. For the quarter ending June 30, Oxy reported year-over-year revenue growth of 57%, with earnings rising 20-fold from the prior year's quarter. As an oil and gas exploration and production company, Occidental has greater operating leverage than integrated majors like Chevron, making it a powerful catalyst during boom times.

However, as oil prices have pulled back since Q2, it's understandable if you think Oxy's hot run was a one-and-done event. Despite the potential for crude prices to surge again, investors may be hesitant due to China's stockpile of crude oil, which has enabled it to ride out supply shocks by importing less oil.

The question now is whether Occidental's earnings can bounce back in a big way, with estimates suggesting $3.93 per share for 2027. However, many investors may prefer the less chancy setup with Chevron, which already factors in Brent crude prices lower than present levels.