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Learn why Occidental’s earnings fell and key tips for Indian investors from Buffett’s approach.

Last Updated: September 2025

• Research suggests Occidental Petroleum's Q2 2025 revenue dipped to $6.4 billion amid oil price volatility, but production hit a robust 1.4 million boe/d, signaling operational strength despite investor concerns.
• It seems likely that Warren Buffett's 28% stake in OXY reflects confidence in long-term value, including carbon capture innovations, even as high debt levels raise eyebrows.
• Evidence leans toward caution for Indian investors, with global oil trends influencing local petrol prices around ₹103.50 per litre in Mumbai, highlighting the need for diversified, patient strategies.
• The controversy around energy transitions underscores both risks and opportunities, with Occidental's green initiatives potentially unlocking future gains amid debates on short-term costs versus sustainability.

Introduction: The Buffett Connection and Occidental’s Rocky Road

Warren Buffett’s Berkshire Hathaway holds a substantial 28% stake in Occidental Petroleum (OXY), positioning it as a cornerstone of his portfolio. Yet, the company's Q2 2025 earnings have sparked unease among investors, showcasing issues like revenue declines, persistent debt, and operational pressures. For Indian investors, where rising energy costs fuel inflation and strain budgets, grasping these dynamics is essential. This analysis uncovers Occidental’s financial hurdles, Buffett’s steadfast strategy, and actionable insights tailored for the Indian market.

Occidental’s Earnings Highlights: The Good, The Bad, and The Ugly

Occidental’s Q2 2025 results paint a nuanced picture. Revenue stood at $6.4 billion, reflecting challenges from softer oil prices. Net debt was trimmed to $23.3 billion, a positive step, while production surged to 1.4 million barrels of oil equivalent per day (boe/d). Though production growth offers hope, squeezed margins from falling prices and interest expenses have fueled investor anxiety.

What’s Dragging Down Occidental? Key Factors

Oil price swings, with Brent around $70 per barrel in September 2025, have hammered revenues. Debt remains a burden at $23.3 billion, limiting flexibility. Investments in carbon capture, like the upcoming Stratos plant, add short-term strain but promise long-term benefits. In India, with petrol at ₹103.50 per litre in Mumbai, these global factors ripple into local economies.

Warren Buffett’s Bet: Why He’s Still Holding On

Buffett’s approach emphasizes enduring value, with Berkshire’s preferred shares yielding 8% dividends. His faith in Occidental’s carbon capture aligns with global sustainability shifts, much like his Apple investment.

For Indian investors, this suggests focusing on resilient firms in renewables.

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In the ever-evolving landscape of global energy markets,

Occidental Petroleum (OXY) stands out as a compelling case study, particularly through the lens of Warren Buffett's investment philosophy. As of September 2025, the company's Q2 earnings report has ignited debates among investors, revealing a blend of operational triumphs and financial headwinds that could shape its trajectory for years to come. This comprehensive exploration delves into the intricacies of Occidental's performance, the strategic rationale behind Buffett's substantial stake, and tailored strategies for Indian investors navigating similar volatile terrains. We'll unpack the data, contextualize it within broader economic trends, and provide practical, evidence-based advice to help you make informed decisions.

Starting with the foundational connection:

Warren Buffett's Berkshire Hathaway has amassed a 28% ownership in Occidental, valued at billions, underscoring its status as one of his premier holdings. This isn't a fleeting interest; Buffett's involvement dates back to strategic acquisitions, including $10 billion in preferred stock that guarantees an 8% dividend yield, providing a steady income stream amid market fluctuations. However, the Q2 2025 earnings, released in August, have introduced notes of caution. Net sales totaled $6.414 billion, with oil and gas segments contributing the lion's share at $5.009 billion. This figure, while substantial, reflects pressures from a 10% quarter-over-quarter drop in realized crude oil prices to $63.76 per barrel. Net income attributable to common stockholders plummeted to $288 million from $992 million year-over-year, translating to a diluted EPS of $0.26 (adjusted to $0.39). These declines have prompted investors to question the stock's resilience, especially in a high-interest-rate environment that amplifies debt servicing costs.

Production metrics offer a brighter spot,

With average global output reaching 1,400 thousand boe/d, surpassing guidance midpoints. Broken down regionally, the Permian Basin led at 770 Mboed, followed by the Rockies & Other Domestic at 272 Mboed, the Gulf of Mexico at 125 Mboed, and International operations at 233 Mboed. This uptick demonstrates operational efficiencies, including $500 million in realized or identified cost reductions year-to-date. Yet, the "ugly" side emerges in the balance sheet: long-term net debt stands at $23.342 billion, though the company has aggressively repaid $3 billion year-to-date via asset sales, organic cash flows, and warrant proceeds. Operating cash flow hit $2.96 billion, supporting $1.998 billion in capital expenditures and yielding $696 million in free cash flow before working capital.

To understand what's truly dragging Occidental down,

Consider three pivotal factors. First, oil price volatility remains a perennial threat. As of September 26, 2025, Brent crude hovers at approximately $70 per barrel, a level that, while stable recently, has fluctuated significantly. In Q2, lower realized prices for crude, natural gas liquids (down 20% to $20.71 per barrel), and domestic gas (down 45% to $1.33 per Mcf) directly eroded revenues. This sensitivity to commodity swings is amplified by geopolitical tensions, OPEC decisions, and the U.S. shale boom, which has flooded markets and suppressed prices. Second, the debt burden, despite reductions, constrains agility. With a liabilities-to-assets ratio of around 58.68% in Q1 2025, Occidental's financial leverage limits dividend payouts and acquisitions. High interest rates exacerbate this, turning debt into a drag on profitability. Third, ambitious carbon capture investments, while visionary, impose immediate costs. The $1.3 billion Stratos Direct Air Capture (DAC) plant in Texas is on track for a 2025 launch, aiming to remove 500,000 tons of CO2 annually. Partnerships, like the 50,000 metric ton removal agreement with JPMorgan Chase, highlight potential revenue from carbon credits, but upfront expenses strain short-term finances.

Buffett's commitment shines through these challenges.

His strategy prioritizes long-term horizons over quarterly noise, evident in Berkshire's accumulation of 265 million shares. The preferred shares ensure reliable dividends, and Occidental's DAC leadership aligns with net-zero ambitions, potentially transforming it into a sustainable energy powerhouse. This mirrors Buffett's patience with Apple, where initial volatility gave way to massive gains. Analysts note that despite a paper loss on the holding, Buffett's endorsement could stabilize the stock.

For Indian investors, these insights are particularly resonant. India's 85% oil import dependency makes global trends acutely felt, with petrol prices in Mumbai steady at ₹103.50 per litre amid INR/USD rates around ₹84-88. A weaker rupee inflates import costs, impacting inflation and stocks like ONGC and Reliance Industries. Consider Ramesh's case: Investing ₹5 lakhs in ONGC and Reliance in 2020 yielded 11% annual returns through diversification and patience, weathering fluctuations. Actionable tips include diversifying across IT, FMCG, and renewables like Tata Power; tracking U.S. inventories and OPEC via tools like Systematic Investment Plans (SIPs) in energy ETFs; and monitoring exchange rates.

Global oil trends further complicate India's energy reality.

The U.S. shale surge lowers prices, benefiting importers but challenging domestic producers. With investments in renewables reaching $62 billion, opportunities abound in green stocks like Adani Green and NTPC. Pro tips: Watch INR/USD closely, as a rate near ₹88 raises costs.

To invest like Buffett, analyze debt-to-equity ratios (Occidental's around 0.89 warrants caution), prioritize dividends (e.g., Coal India's 7% yield), and embrace ESG with firms like Adani Green. Use checklists for screening: Evaluate fundamentals, growth potential, and market positions.

Occidental's green angle is a gamble worth watching. The Stratos plant, alongside Reliance's ₹75,000 crore solar investments, signals a shift to hydrogen and renewables. This could generate new revenues via carbon markets, but risks include execution delays.

In conclusion, Occidental's Q2 2025 earnings underscore energy sector volatility, yet Buffett's support highlights latent potential in sustainability. Indian investors: Stay diversified, informed, and patient. Download a free value investing checklist and explore energy ETFs today for resilient portfolios.

Key Citations:

• Occidental Petroleum Q2 2025 Earnings Press Release PDF
• Warren Buffett May Be Retiring, But His Favorite Energy Stock Just...
• Brent crude oil - Price - Chart - Historical Data
• Oxy's $1.3B Texas carbon capture facility on track to launch this year
• Petrol Price in India Today (26th September 2025)
• This Top Warren Buffett Stock Continues to Deliver an Impressive...
• Warren Buffett: 38 Occidental Petroleum transactions
• Crude oil price chart 2020-2025 - Statista
• Occidental Petroleum: Will Buffett's Endorsement Be Enough To...
• 1PointFive Announces 50,000 Metric Ton Carbon Removal...
• Buffett Erred in Buying Big Stake in Occidental...
• INR to USD Exchange Rate History for 2025
• 5 Best Energy Stocks to Buy in India for 2025
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• Best Green Energy Stocks in India 2025 - 5paisa
• Indian Rupee to US Dollar History: 2025
• Indian rupee to US dollars Exchange Rate History
• India's US$62 billion energy transition investments
• Green Energy Investment Picks India 2025
• How to evaluate indian energy stocks for growth
• Occidental's First Large-Scale DAC Hub to Capture...
• Occidental Petroleum Carbon Capture Initiatives for 2025