Why Occidental Petroleum Stock Slumped 17% in 2024 but Could Rally in 2025


2024 was a bummer year for Occidental Petroleum (OXY -2.63%) — the oil and gas stock lost 17.3% value in the year, according to data provided by S&P Global Market Intelligence. Occidental was, in fact, one of the worst-performing large-cap energy stocks of 2024, significantly lagging the S&P 500 index, which gained 23% in the year.

Despite Warren Buffett’s holding company, Berkshire Hathaway, consistently buying shares of Occidental Petroleum throughout 2024, investors remained on the sidelines as Occidental’s debt rose while crude oil prices fell. Occidental Petroleum, however, delivered promising numbers last quarter and looks like a top oil stock to buy for 2025.

The fear of falling oil prices

Occidental stock took the biggest hit in the second half of 2024, which is also when the company made a big acquisition. Occidental acquired CrownRock for nearly $12 billion in August last year. While the purchase price included CrownRock’s existing debt of $1.2 billion, Occidental funded the acquisition with almost $9 billion of new debt.

That significantly drove Occidental’s debt higher. Meanwhile, crude oil prices fell in the latter half of 2024. The dual factor spooked investors, as they expected lower oil prices to hit Occidental’s bottom line and cash flows even as its interest expense rose.

Occidental, however, committed to cutting down debt and focusing on shareholder returns, but investors weren’t convinced. Occidental’s performance in the third quarter, however, should reignite investor interest in the stock.

Why Occidental Petroleum is a top stock to buy in 2025

Occidental targeted a debt reduction of $4.5 billion within a year of acquiring CrownRock. Remarkably, the oil and gas producer achieved 90% of its short-term reduction goal within just about two months of the acquisition.

Meanwhile, Occidental also generated strong cash flows in the third quarter, driven by CrownRock assets, which expanded its footprint significantly in the Permian and Midland basins. Occidental expects the acquisition to add $1 billion in free cash flow within the first year at a West Texas Intermediate (WTI) crude oil price of around $70 per barrel.

Occidental’s production is on the rise, and management remains committed to paring debt further in 2025 regardless of where oil prices are. Meanwhile, Occidental is also investing in other businesses, including OxyChem and carbon capture and storage, both of which have strong growth catalysts.

With Occidental Petroleum also likely to raise its dividend yet again in 2025 — it increased its dividend by 22% in 2024 — the stock looks like a solid potential turnaround story for 2025.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.



Occidental Petroleum, one of the leading energy companies in the United States, saw its stock price slump by 17% in 2024. The decline was primarily driven by a combination of factors, including weak oil prices, geopolitical tensions, and concerns about the company’s debt levels.

Oil prices have been volatile in recent years, with oversupply and weak demand putting pressure on prices. Occidental Petroleum, like many other oil companies, has been impacted by this challenging environment, leading to lower revenues and profitability.

Additionally, geopolitical tensions in key oil-producing regions, such as the Middle East, have also weighed on Occidental Petroleum’s stock price. The uncertainty surrounding political stability and potential supply disruptions have added to investor concerns about the company’s future prospects.

Furthermore, Occidental Petroleum’s high debt levels have raised red flags among investors. The company took on significant debt to acquire Anadarko Petroleum in 2019, a move that has weighed on its balance sheet and raised questions about its ability to manage its debt obligations.

Despite these challenges, there are reasons to believe that Occidental Petroleum’s stock could rally in 2025. The company has been taking steps to reduce its debt levels, including selling non-core assets and cutting costs. These efforts could help improve its financial position and boost investor confidence.

Additionally, if oil prices recover and geopolitical tensions ease, Occidental Petroleum could benefit from higher revenues and improved profitability. The company’s strong portfolio of assets and its focus on operational efficiency could also support its stock price in the long term.

Overall, while Occidental Petroleum’s stock may have slumped in 2024, there is potential for a rebound in 2025. Investors should keep an eye on the company’s debt reduction efforts, oil price trends, and geopolitical developments to assess the company’s future prospects.

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