Occidental Petroleum Corp (NYSE: OXY) is inching higher this morning after Israel launched an airstrike on Iran, resulting in a meaningful increase in oil prices.
Brent crude gained as much as 7.0% today following reports that Israel’s attack has killed senior Iranian officials, sparking fears of broader regional escalation.
This new wave of geopolitical risk is prompting investors to reconsider their exposure to oil, and OXY shares may be one of the best-positioned in the energy sector to benefit from this uncertainty.
Why is Occidental stock worth owning in 2025?
Occidental lacks the scale of its larger peers (Exxon and Chevron), but its smaller size means it can respond more sensitively – and potentially more profitably – to sharp movements in oil prices.
Down more than 25% versus its 52-week high, OXY stock presents an exciting combination of upside potential and fundamental strength at the time of writing.
Occidental shares are attractive as the company spans the full oil and gas value chain: upstream, midstream, and downstream.
This integrated model provides some insulation against volatility, but due to its scale, OXY still tends to move more closely with the price of crude than its larger peers.
In the current environment, where oil supply fears (related to Israel-Iran tension) are driving prices higher, that dynamic could play in favour of the NYSE-listed firm.
Warren Buffett currently owns OXY shares
Occidental stock may also be worth owning because the company has been on an exciting growth trajectory.
Since its bold 2019 acquisition of Anadarko Petroleum, backed by Warren Buffett, the company has made no secret of its intention to scale up.
Although the Anadarko deal left OXY heavily leveraged, management has worked diligently to improve the balance sheet while continuing to pursue strategic growth.
Two more acquisitions since then have signalled the management’s determination to compete at the top of the industry.
Additionally, Buffett’s multinational conglomerate Berkshire Hathaway has steadily increased its stake in Occidental Petroleum, now owning more than 25% of it.
That vote of confidence is meaningful: not only does it reinforce the company’s long-term value, but it also suggests Berkshire believes OXY shares are a strong inflation and energy shock hedge.
Should you invest in Occidental at current levels?
Note that Occidental Petroleum reported better-than-expected earnings for its fiscal Q1 last month, which further invokes confidence in buying OXY at current levels.
The company’s revenue was also up nearly 14% on a year-over-year basis in the first quarter.
While the consensus rating on OXY stock currently sits at “hold” only, analysts’ price target on it go as high as $72 at the time of writing, indicating potential upside of more than 50% from current levels.
Finally, a 2.08% dividend yield makes this oil stock all the more exciting to own in 2025.
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