Occidental Petroleum underperforms despite Brent crude surging 80% to $110 amid Middle East tensions and tight supply.
Occidental Petroleum shares have risen only 30% over the past year, trailing Brent crude’s 80% gain to nearly $110 per barrel. The divergence reflects market expectations that the Strait of Hormuz will reopen and global oil supplies will normalize, easing prices.
Brent crude has surged past the $60-$70 range analysts anticipated, driven by Middle East geopolitical risks and supply constraints. Persian Gulf producers shut in wells as storage reached capacity, while global inventories were depleted by hundreds of millions of barrels. Restarting wells and rebuilding stocks could take months, prolonging tight supply.
The oil market may remain constrained into 2027, sustaining elevated prices. Occidental’s debt reduction and asset sales have strengthened its balance sheet, but its stock performance lags the broader sector.