Occidental Petroleum Surges as Greg Abel's Berkshire Hathaway Holds Key to Oil Prices

Greg Abel, the new CEO of Berkshire Hathaway, has led Occidental Petroleum to a nearly 36% surge in shares since January. This outperforms major indexes like the S&P 500 and other oil stocks such as Chevron.

The escalation of the U.S.-Iran conflict earlier this year drove up crude oil prices, contributing to Occidental's rise from mid-$40s per share to $67.45. The company's latest results show revenue growth of 57% and earnings rising 20-fold year-over-year.

As an oil and gas exploration and production company, Occidental has greater operating leverage than integrated majors like Chevron. This can be a powerful catalyst during boom times but also poses risks in downturns.

The company's pure play on fossil fuel prices makes it a largely binary bet, tied to the resurgence of crude oil prices. China's stockpile of crude oil has kept prices from spiking, but eventually this will run dry and lead to higher prices when replenished.