Is Occidental Petroleum Still a Buy Now that WTI's Down to $70 a Barrel?

Occidental Petroleum (NYSE: OXY), the oil and gas giant more commonly known as Oxy, hit a 52-week high of $67.45 per share on March 31. That year-to-date gain of nearly 60% was largely driven by the Middle East conflict's impact on oil prices.

But as of this writing, Oxy's stock trades at about $50. It pulled back as WTI crude oil prices retreated from a four-year high of $112.25 per barrel in mid-May to around $70. Let's see why Oxy's stock is tightly tethered to crude oil prices -- and if it's still worth buying today.

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Why is Oxy pinned to oil prices?

Oxy is less diversified than integrated energy giants like ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX). While ExxonMobil and Chevron operate a diverse mix of upstream, midstream, and downstream businesses, Oxy generates most of its revenue from its upstream business -- which handles the exploration, drilling, and extraction of oil and natural gas.

A smaller percentage of Oxy's revenue comes from its midstream business, which operates oil and gas pipelines. A small but growing sliver of its top line comes from its low-carbon ventures business, which develops carbon capture and direct air capture technologies.

Generally speaking, rising oil prices provide the strongest tailwinds for upstream companies, as their revenue growth will easily outpace operating expenses. But when oil prices decline, their expenses can rise faster than their revenues.

So when crude oil prices surged earlier this year, Oxy's stock outperformed ExxonMobil and Chevron. However, Oxy underperformed both energy giants over the past month after a ceasefire and peace talks between the U.S. and Iran reduced crude oil prices.

Why Oxy is still a safe oil stock (for now)

To sustain its current capital expenditures and dividends, Oxy needs oil to remain above $40- $45 per barrel. Its free cash flow also significantly increases at above $60 per barrel.

WTI was below $60 per barrel throughout most of 2025 and early 2026, but it hasn't fallen below $45 since the COVID-19 pandemic in 2020. Therefore, Oxy's profits should continue rising unless a global recession triggers another historical collapse in oil demand.

Oxy's stock still looks cheap at 10 times forward earnings, but that multiple could rise if analysts lower their near-term forecasts to reflect declining oil prices. That said, its business is broadly stable, and it's taken major steps to reduce its debt from its poorly timed $55 billion acquisition of Anadarko in 2019. It's a safe oil stock to hold right now, but I'd prefer to invest in more diversified energy plays like ExxonMobil and Chevron in this choppy market.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.