Warren Buffett’s high-conviction bet on Occidental Petroleum (NYSE: OXY) is facing one of its toughest tests yet.
OXY shares have plunged to their lowest level since February 2022, trading at $36.26 at press time on April 11.
The stock is down 26% year-to-date, marking a sharp reversal from earlier 2025 highs above $50. It has also significantly underperformed the broader energy sector, which is down about 12% over the same period.
The slide has dealt a significant blow to Berkshire Hathaway (NYSE: BRK.A), which owns nearly 265 million shares of Occidental at an average cost of $54.20.
That translates to an estimated paper loss of $4.7 billion, making it one of the most challenged equity holdings in Buffett’s portfolio. Berkshire’s stake represents a commanding 28% ownership in the oil and gas company.
Why Occidental Petroleum is falling
The latest downturn in OXY comes as West Texas Intermediate (WTI) crude falls below $60 per barrel, driven by growing fears of a global recession and fresh trade tensions following the U.S. administration’s latest round of tariffs on China.
This broader macro pressure has soured investor sentiment toward oil producers, and Occidental with its relatively higher debt load is bearing the brunt of it.
Interestingly, the company reported stronger pricing in Q1. Occidental realized $71.07 per barrel for oil, slightly higher than the $69.73 recorded in Q4 2024, while natural gas prices surged 92% to $2.42 per Mcf. Natural gas liquids (NGLs) also rose nearly 19% from the prior quarter.
However, these sequential gains have done little to offset market concerns.
Despite the pricing tailwinds, analysts remain cautious. According to Roth MKM, Occidental continues to trail behind industry peers on several key fronts.
The company still carries a heavier debt burden, is growing production more slowly, and is spending heavily on carbon-capture technology, a long-term but capital-intensive strategy.
That being said, for now, Occidental Petroleum remains one of the most visible pressure points in Berkshire Hathaway’s equity portfolio, and investors will be watching closely as the company prepares to report earnings on May 8.
Featured image via Shutterstock
