Is Occidental Petroleum (OXY) The Best Energy Stock to Buy Now?

Why It Matters

The dual endorsement from Berkshire and Oxy’s carbon‑capture strategy position the stock as a rare blend of traditional energy cash flow and future‑focused sustainability, potentially delivering outsized returns as the market shifts.

Key Takeaways

• Berkshire Hathaway owns ~29% of Occidental Petroleum
• Oxy acquired chemicals business for $9.7 billion
• STRATOS DAC plant begins operations this year
• Carbon‑removal credits sold to Microsoft, BlackRock
• Net‑zero oil offers higher margins, lower decline rates

Pulse Analysis

Berkshire Hathaway’s near‑30% ownership of Occidental Petroleum sends a powerful signal to the market. The conglomerate’s confidence is reinforced by Oxy’s $9.7 billion purchase of a chemicals unit, which diversifies earnings and improves cash conversion. For investors, Berkshire’s track record of backing resilient, cash‑generating businesses adds a layer of credibility that often translates into premium valuations and lower cost of capital.

At the heart of Oxy’s transformation is its Direct Air Capture (DAC) facility, STRATOS, scheduled to go live this year. The plant captures CO₂ directly from the atmosphere and pairs it with the company’s existing oil‑field infrastructure to produce carbon‑negative crude. High‑margin contracts with tech and finance giants such as Microsoft and BlackRock demonstrate that the market is willing to pay premium prices for verifiable carbon‑removal credits, creating a new revenue stream that is largely insulated from oil price volatility.

Looking ahead, Oxy’s net‑zero oil model could redefine profitability in a decarbonizing world. By delivering oil with a negative carbon footprint, the firm can command higher margins while facing slower production decline rates than peers. This hybrid approach—combining traditional upstream cash flow with scalable clean‑energy services—offers investors a compelling risk‑adjusted upside, especially as regulators and consumers increasingly favor low‑carbon solutions. However, execution risk remains, and the success of STRATOS will be a key catalyst for the stock’s long‑term trajectory.