Why Occidental Petroleum Rallied Today

By Billy Duberstein – Mar 12, 2026 at 4:43PM ESTKey PointsIran struck several ships in the Strait of Hormuz over the past day. Its new Ayatollah said the Strait will remained closed, in an effort to pressure the U.S.

But President Trump seemed to take the threat in stride, noting the elimination of Iran's nuclear capabilities is the bigger concern than oil prices. Shares of Occidental Petroleum (OXY +5.22%) rallied 5.1% on Thursday. Occidental is one of Warren Buffett's two favorite oil and gas companies and Berkshire Hathaway's (BRKA 0.46%) (BRKB 0.38%) seventh-largest overall public equity position. Days like today explain why Buffett likes Occidental's strategic positioning so much. If global oil supplies are cut off in geopolitically fraught geographies overseas, Occidental's deep, low-cost inventory in the Permian Basin becomes a very valuable asset. ExpandNYSE: OXYOccidental PetroleumToday's Change(5.22%) $2.90Current Price$58.48Key Data PointsMarket Cap$55BDay's Range$56.42 - $59.1552wk Range$34.78 - $59.15Volume1.9MAvg Vol13MGross Margin31.94%Dividend Yield1.76% Oil prices spike as Iran vows to keep Strait of Hormuz closed The ongoing war has pushed up oil and liquefied natural gas prices worldwide. This is because about 20% of global oil supplies flow through the narrow Strait of Hormuz, which separates Iran, Oman, and the United Arab Emirates. While the IEA and U.S. have each announced large oil releases from strategic petroleum reserves yesterday and today, these are relatively temporary fixes to the problem if the Strait remains closed or limited for an extended period of time. Today, Iran's new Ayatollah, Mojtaba Khamenei, released a statement that Iran won't back down from the war, and that the Strait of Hormuz should remain closed. Meanwhile, at least three commercial ships have been hit by Iranian projectiles over the past 24 hours, making the possibility of opening the Strait seem rather far off at the moment. Despite the attacks and intransigence of the Iranian regime, President Trump doesn't appear to be set on ending the war just yet. Today, Trump said that Iran not having nuclear weapons was, "of far greater interest and importance to me" than oil prices, while also noting, "The United States is the largest oil producer in the world, by far, so when oil prices go up, we make a lot of money." One of those major U.S. oil producers is Occidental Petroleum, which is one of the largest acreage holders in the United States, especially in the low-cost and plentiful Permian Basin. While Occidental is exploring sites in troubled Middle East geographies, its entire international segment accounts for less than 20% of total barrels. And much of that segment is in Algeria, which does not need the Strait of Hormuz to transport its oil. Image source: Getty Images. Should you follow Buffett into Occidental? Interestingly, even after the rapid year-to-date rise in Occidental Petroleum's stock, its current stock price is $58.41, which is not that much higher than Buffett's average cost in the stock of $54.20, according to estimates. One of the reasons Buffett likes the company so much is its operational excellence, low per-barrel costs, and deep inventory. Last year, the company generated $4.3 billion in free cash flow before working capital, which means it trades at only a 13.5 times free cash flow multiple today, even though those cash flows occurred at last year's much lower oil prices. As such, Occidental remains a compelling way to play higher-for-longer oil prices should the war go on longer than thought. Read NextMar 12, 2026 •By Ryan VanzoPrediction: Global Demand for This Oil Stock May Be Poised to ClimbMar 6, 2026 •By Matt DiLalloWhy Occidental Petroleum Stock Rocketed Nearly 17% in FebruaryMar 2, 2026 •By Eric VolkmanWhy Occidental Petroleum Stock Jumped on MondayMar 2, 2026 •By Matt DiLalloAnalysts Predict The Iran Conflict Could Drive Oil to $100 a Barrel. Here's Why it Could be a Short Stay.Mar 1, 2026 •By Brett Schafer2 No-Brainer Energy Stocks to Buy Right NowMar 1, 2026 •By Courtney CarlsenOccidental Petroleum: Buy, Sell, or Hold?About the AuthorBilly Duberstein is a contributing Motley Fool technology analyst covering semiconductors, hardware, software, and AI, as well as consumer goods. Billy loves looking at the story behind investments from an interdisciplinary point of view, with an equal appetite for high-growth disruptors and beaten-down value names. He is also CEO of Stone Oak Capital, a registered investment adviser in California. He previously worked as a technology analyst for several hedge funds and as a research assistant at Wedbush Securities. Billy holds an MBA in finance from New York University and a bachelor’s degree in music from the University of Virginia.TMFStoneOakStocks MentionedOccidental PetroleumNYSE: OXY$58.48(+5.22%)+$2.90Berkshire HathawayNYSE: BRKA$736,625.00(-0.46%)-$3,375.00Berkshire HathawayNYSE: BRKB$491.69(-0.38%)-$1.88*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.