If you’ve spent any time looking at energy stocks lately, you’ve probably seen the ticker OXY popping up everywhere. It’s one of those companies that people either love or feel totally confused by. Honestly, it’s not just another oil company. It's basically a massive bet on two things: the resilience of the Permian Basin and the future of carbon capture.
Right now, Occidental Petroleum Corp stock is sitting in a fascinating spot. We’re in January 2026, and the landscape has shifted significantly from the "growth at all costs" era of the past decade.
The Warren Buffett Effect: Why Everyone is Watching
You can't talk about OXY without mentioning Warren Buffett. It’s impossible. As of early 2026, Berkshire Hathaway’s fingerprints are all over this company. It’s not just that they own roughly 27% to 28% of the common shares; it’s the way they’ve deepened the relationship.
Recently, Berkshire made a massive $9.7 billion move to buy OxyChem, Occidental's chemical division. That was a huge deal. It was likely one of the last big plays Buffett oversaw before officially handing the CEO reins at Berkshire to Greg Abel on January 1, 2026.
For OXY, selling the chemical arm wasn't about getting out of a bad business—OxyChem was actually quite profitable. It was about debt.
Basically, Occidental had a mountain of leverage from its previous acquisitions of Anadarko and CrownRock. By selling OxyChem to Buffett, they managed to slice off a giant chunk of that debt. We’re talking about a company that’s been laser-focused on getting its principal debt down below $15 billion. They are finally seeing the light at the end of that tunnel.
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Permian Dominance and the CrownRock Factor
In 2024, Occidental closed its $12.4 billion acquisition of CrownRock. Fast forward to today, and the integration is mostly a done deal. Why does this matter for the stock price?
Scale.
The Permian Basin is the heart of American oil. By folding CrownRock’s 94,000 net acres into its portfolio, OXY secured a massive runway of "high-margin" inventory. These aren't just random wells; they are locations that can turn a profit even if oil prices take a dip into the $60s or lower.
- Production: Currently, they're looking at flat-to-slight growth, roughly 1.4 to 1.5 million barrels of oil equivalent per day.
- Cost Cutting: Management has been aggressive, targeting $500 million in cost reductions.
- Efficiency: They’ve leaned heavily into automation and AI-driven field sensors to squeeze every bit of value out of the ground for about $8.55 per barrel in operating costs.
Vicki Hollub, the CEO, has been adamant that 2026 is about "operational excellence." They aren't trying to drill every hole possible. They are trying to drill the best holes and use the cash to pay down the remaining debt.
The "Green" Wildcard: Direct Air Capture
Here is where OXY gets weird (and interesting). They are arguably the most aggressive big oil company when it comes to Direct Air Capture (DAC).
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Through their subsidiary, 1PointFive, they’ve been building a massive facility called STRATOS in Texas. It’s designed to suck CO2 straight out of the sky. Just this month, in January 2026, they signed a deal with Bain & Company for 9,000 metric tons of carbon removal credits.
Is this a gimmick? Some critics think so. They argue that OXY is just using DAC as a way to extend the life of their oil business through "enhanced oil recovery" (pushing CO2 into wells to get more oil out).
But the business side is real. They are selling these carbon credits to tech giants and consulting firms who need to hit net-zero targets. If the carbon credit market takes off, OXY isn't just an oil company anymore. They’re a carbon management company. That’s a totally different valuation model.
What the Analysts are Saying
If you look at Wall Street, the vibe is... cautious. It’s a "Hold" for most.
Analysts from firms like Zacks and WallStreetZen have price targets generally hovering in the $48 to $52 range for the next year. Some optimists see it hitting $67, while the bears think it could slide back to $38 if oil prices crater.
The reality is that Occidental Petroleum Corp stock is currently trading around $42-$43. That implies some decent upside if they keep hitting their debt targets, but it’s not a "get rich quick" stock. It’s a cash flow story.
Real Talk on the Numbers
- Dividend: They just declared a quarterly dividend of $0.24 per share. It’s not a huge yield, but it’s stable.
- Revenue: Estimates for the full year 2026 are sitting around $34 billion.
- Earnings: Analysts expect earnings per share (EPS) to grow as the interest payments on their debt decrease.
The Risks: What Could Go Wrong?
It's not all sunshine and Buffett deals. There are real risks here.
First, oil is a commodity. If global demand slumps or OPEC+ decides to flood the market, OXY's cash flow takes a direct hit. They have a lot of "leverage" to the price of oil. When prices go up, OXY flies. When they drop, OXY feels the pain more than a diversified giant like Chevron or Exxon.
Second, the pivot away from chemicals (selling OxyChem) means they have less of a hedge. Chemicals usually do well when oil is cheap because their raw material costs go down. Now, OXY is much more of a "pure play" on oil production and carbon tech.
Third, the "Low Carbon Ventures" are expensive. They are spending hundreds of millions on DAC. If the government changes its stance on carbon subsidies (like the 45Q tax credits), that part of the business could become a financial drag rather than a future goldmine.
Actionable Insights for Investors
So, what do you actually do with this information?
If you're looking for a safe, high-yield dividend play, this probably isn't it. You’d be better off looking at some of the bigger "Supermajors."
However, if you believe that:
- Oil will stay above $65 for the foreseeable future.
- Warren Buffett knows something about the company's intrinsic value that the rest of the market is missing.
- Carbon removal will become a multibillion-dollar industry by 2030.
Then OXY looks like a compelling "value" play at current prices.
Next Steps for Your Research:
Check the next quarterly earnings report for the "Debt-to-EBITDA" ratio. If that number keeps falling, it’s a sign that the "Buffett-approved" plan is working. Also, keep an eye on the STRATOS facility milestones. If they start capturing and sequestering CO2 at scale this year, the narrative around the stock will shift from "old oil" to "new energy" very quickly.
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Focus on the debt reduction. That is the real engine behind the stock price for the next 12 months. Once they hit that $15 billion target, expect them to pivot hard toward share buybacks, which is exactly what Buffett likes to see.