Occidental Petroleum's shares rose 4.9% on Thursday after the oil and gas producer generated $3 billion in free cash flow, its strongest quarterly performance since Q3 2022. The company used the cash to cut debt by $1.9 billion to $11.8 billion, moving within $1.8 billion of its $10 billion debt target. Operating cash flow reached $5.1 billion whilst capital spending remained at $1.6 billion. Occidental also raised its quarterly dividend 8% to $0.28 per share. Production averaged 1.433 million barrels of oil equivalent per day, exceeding guidance. Adjusted earnings hit $2.40 per diluted share on net income of $2.8 billion. Realised crude prices jumped 38% sequentially to $96.78 per barrel, boosting profitability. The stock now trades at $56.29, roughly 22.4% above its estimated fair value of $45.99.

Occidental Petroleum reported net income of $2.8 billion for the second quarter of 2026, up from $288 million a year earlier. Adjusted income rose to $2.4 billion, or $2.40 per diluted share, from $296 million, or $0.26 per share, in the same period of 2025. The improvement was driven by higher crude prices and a turnaround in midstream operations. Occidental's average worldwide realized crude price increased 38% sequentially to $96.78 per barrel. The midstream segment generated $1.3 billion in pre-tax income, reversing a $87 million loss in the previous quarter. Global production averaged 1.433 million barrels of oil equivalent per day, above guidance. Occidental reduced principal debt by $1.9 billion to $11.8 billion and raised its quarterly dividend 8% to $0.28 per share.

US President Donald Trump announced negotiations with Iran would begin Monday, focusing on reopening the Strait of Hormuz and the country's nuclear programme. The news sent crude oil prices tumbling, with Brent futures down 4.6% to $83.88 per barrel and WTI futures falling 4.5% to $77.80. The United States Oil Fund dropped more than 6% in premarket trading. Energy stocks also declined, with Chevron falling 1.2% and Exxon Mobil slipping 1.6%. Occidental Petroleum lost 1.5%, whilst Devon Energy and APA Corp dropped 2.6% and 2.8% respectively. Separately, Barclays raised its price target on Chevron to $216 from $213, citing record Permian production and stronger refining margins following the company's second-quarter results.