Brent crude ripped 8.1% last week. It kept ripping overnight on Trump’s Sunday warning to Iran. The Strait of Hormuz has been effectively closed since February 28 — that’s 11 straight weeks. And there’s exactly one major-cap U.S. oil name that has zero tanker exposure through the Persian Gulf:
Occidental Petroleum (NYSE: OXY).
The Buffett favorite. The Permian fortress. The stock Warren Buffett has been buying every time it dips for two years running.
The numbers say “cash printer.”
- Q4 2025 total production: 1,481 thousand barrels of oil equivalent per day (Mboed) — above the high end of guidance
- Permian Basin production: Hit a record 800 Mboed in Q3 2025
- Berkshire Hathaway ownership: ~29% of float
- YTD 2026 performance: +33.1%, well ahead of the broader market
- Breakeven: Operations meaningfully profitable above $50 Brent; upside accelerates north of $85
At $110 Brent, every incremental dollar above ~$85 falls almost straight to free cash flow. That’s the dividend-hike math, the buyback math, and the deleveraging math — all running at the same time.
What changed in 2026 that makes OXY different.
Earlier this year, Occidental closed the sale of its chemicals division (OxyChem) to Berkshire Hathaway. That cleaned up the balance sheet, deleveraged the post-Anadarko debt overhang, and let management focus on the two engines that matter: Permian production and the Direct Air Capture (DAC) business.
The Permian story is the trade for today. The DAC story is the asymmetric option for the second half of the decade — OXY is building the largest carbon-capture infrastructure on the planet, and the tax credit math (45Q) is now legislatively locked in through 2032.
The risk that should keep you honest.
OXY is a pure oil-price play. If Iran talks suddenly thaw — and one Trump phone call can change the picture overnight — the geopolitical premium evaporates and OXY pulls back 8–10% in a single session. That’s not a hypothetical: it’s the trade that ran in early April when the truce headlines hit.
The hedge: pair OXY long with a small E&P put spread (the XLE June $90 puts are liquid), or just accept the volatility and let Buffett’s 29% stake be your psychological floor.
The Play
Own OXY into the Iran headline cycle. The base case is range-bound at $80–$85 with violent upside spikes on escalation. Add on dips, trim on $90+ rips. The second-derivative trades are the refiners (VLO, MPC) — Gulf Coast crack spreads averaged $41.75 per barrel last week, the highest sustained level in two decades.
And keep one ear on the Saudi reaction. If OPEC+ starts hinting at production increases to cap the rally, this trade comes off fast. Until they do? Brent at $110 with a closed Strait is OXY’s home turf.
Stay caffeinated.