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3 No-Brainer Warren Buffett Stocks to Buy Right Now

Key Points

  • Credit card middleman American Express has earned its way to Berkshire's No. 2 spot for all the right reasons.

  • While the oil and gas industry may be running on borrowed time, it's borrowed a lot of time, during which there's lot of money to be made.

  • The recent purchase of a stake in Pool Corp. seems unusual on the surface. But a closer look reveals the Buffett-like thinking behind the trade.

Veteran investors know the market is forever changing, requiring you to change with it. These changes include industry leadership, stock-selection strategies, allocation adjustments, and more.

There are still some reliable constants though. One of them is Warren Buffett, and the picks he makes -- or at least approves -- for Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio. If a stock becomes a Berkshire holding, you can bet it's a quality name with a promising future.

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Here's a closer look at three Warren Buffett picks currently held by Berkshire Hathaway that just might work for your portfolio as well.

Warren Buffett.

Image source: The Motley Fool.

1. American Express

Buffett's done a fair amount of selling over the past few quarters, lightening up on Berkshire's positions in Apple, Bank of America, and DaVita, and outright exiting its stakes in Citigroup and Nu Holdings.

One stock has remained conspicuously untouched for years now, however, to quietly become Berkshire Hathaway's second-biggest holding (right behind Apple). That's credit card outfit American Express (NYSE: AXP).

It's not too difficult to see why Buffett's such a fan, though; the company's certainly more than proven it knows how to make its unique business model work.

On the surface it's just another credit card company. Under the hood though, it's more. Unlike Visa and Mastercard, which are only payment networks for card issuers, American Express is both the issuer and the payment middleman.

This leveraged position allows it to offer a perks and rewards program that cardholders are willing to pay up to $700 per year just to access. This annual fee also means American Express' cardholders tend to be a bit more affluent than the average consumer, and as such are less likely to miss payments, and more likely to continue spending even when other people are tightening their purse strings.

And the proof is in the company's results. With the obvious exception of 2020 when the COVID-19 pandemic was in full swing, Amex's top line has improved every year going all the way back to 2017.

Profit growth hasn't been quite as consistent. It's remained reliable enough, however, to make American Express a solid dividend stock. Although the company tends to not raise its dividend payments in times of uncertainty -- like in the wake of 2008's subprime mortgage meltdown or during the COVID-19 pandemic -- it still continues to pay a quarterly dividend, and begins raising these payments again as soon as the economy makes it feasible to do so.

2. Occidental Petroleum

If it seems like the oil and gas business is inching its way to obsolescence, that's because it is. With the advent of electric cars and renewable energy sources, consumers just won't need oil like they have in the past. To this end, Goldman Sachs predicts "peak oil" -- the point at which the planet's daily consumption of crude stops growing and starts shrinking -- will happen in 2035.

There's a reason, however, that Buffett remains enough of a fan of oil giant Occidental Petroleum (NYSE: OXY) to stick with Berkshire's 265 million share position despite the stock's relatively poor performance of late. That is, there's still a great deal of money to be made in the business between now and then, and even after 2035.

See, while demand will likely start to shrink then, it's apt to shrink very, very slowly. Indeed, outlooks from ExxonMobil, OPEC, and Standard & Poor's all suggest that oil will still be the world's top source of energy production as far down the road as 2050. The continued proliferation of alternative energy options just won't be able to keep up with the ever-growing demand for electricity.

And Buffett feels very good about Occidental's ability to deliver, even in an environment where crude oil prices remain subdued. As he noted in 2023's letter (published in early 2024) to Berkshire Hathaway shareholders:

"Under Vicki Hollub's leadership, Occidental is doing the right things for both its country and its owners. No one knows what oil prices will do over the next month, year, or decade. But Vicki does know how to separate oil from rock, and that's an uncommon talent, valuable to her shareholders and to her country."

That's strong personal praise from the Oracle of Omaha.

The kicker: Buffett also touted the potential of the carbon-capture technology that Occidental Petroleum is developing, which literally sucks carbon dioxide out of the ambient air. While it's not quite yet ready for mass commercialization, that day is coming, and soon, putting Occidental into what's apt to be another multibillion-dollar market.

3. Pool Corp.

Finally, add Pool Corp. (NASDAQ: POOL) to your list of Warren Buffett stocks you might want to buy for yourself right now.

It's the smallest and least-known of the three companies in focus here, with a market cap of only $11 billion. It's not a particularly big Berkshire holding either; the conglomerate's 1.5 million Pool Corp. shares are worth less than $500 million, which is less than 4% of Pool itself.

This relatively small stake makes Buffett's interest in the company all the more telling. While owning this much Pool stock doesn't actually do much for Berkshire's bottom line, Buffett and/or his lieutenants waded in anyway. There's a reason, even if it's not yet clear.

But first things first. Yes, this is the company that sells swimming pool supplies. It's the biggest name in the business, in fact, doing $5.3 billion worth of business last year. Of that, $617 million was turned into net income.

Curiously, both of those numbers were down from 2023's comparisons. Neither figure is expected to improve any this year, either. Berkshire bought the stock anyway despite its relatively rich valuation of 28 times this year's expected per-share profit of $10.88. It's a significant vote of confidence in this company's future growth prospects.

The thing is, it may not be a crazy bet at all.

There's no denying this stock's been a poor performer since 2021's peak, largely due to headwinds on the residential real estate front, where costs have soared. Investors are just worried, and understandably so.

As Buffett says though, "Be fearful when others are greedy and greedy when others are fearful." This business may be struggling right now, but it will eventually thrive again once the economy gets back up to full speed and the highly cyclical homebuying and home-improvement markets perk up, in turn driving demand for pools, and, subsequently, demand for pool maintenance supplies. Berkshire's just positioning in a quality company now for whenever that recovery materializes.

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American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Goldman Sachs Group, Mastercard, and Visa. The Motley Fool recommends Nu Holdings and Occidental Petroleum. The Motley Fool has a disclosure policy.

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Warren Buffett and Berkshire Hathaway Remain Cautious as Stocks Soar. Should Investors Follow Suit?

Key Points

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) and its chief executive officer, legendary investor Warren Buffett, continued to shun stocks in Q2. Buffett has long been considered one of the world's best investors, but he's been selling a lot more stocks than buying recently.

In fact, the second quarter was the 11th straight quarter in which Buffett was a net seller. During the quarter, he bought about $4 billion in stock while selling roughly $7 billion. Last year, Buffett aggressively pared his stakes in a few top holdings, most notably Apple and Bank of America. In total, he was a net seller of more than $130 billion worth of stock last year.

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Berkshire also continued its streak of not buying back any of its own stock. The conglomerate hasn't made any repurchases since May 2024. Buffett previously would only buy back stock when Berkshire shares were trading at 1.1 times book value or below, before later moving it to 1.2 times. It then stopped using price-to-book (P/B) altogether, saying it wasn't necessarily reflective of Berkshire's true intrinsic value.

However, as Berkshire's P/B has crept up, he's stopped buying back stock. Berkshire P/B now stands at 1.5 times, down from about 1.8 times earlier this year and closer to where it's been trading the past few years. It will likely have to write down its investment in Occidental Petroleum, as it is carrying the 25% position it has in the stock on its balance sheet at more than $4 billion above its current value, but given Berkshire's size, that should have a minimal impact on its book value.

Meanwhile, Berkshire ended the quarter with a colossal $344 billion in cash and equivalents on its balance sheet. Taken altogether, it appears that Buffett continues to think the value of stocks, including his own, remains too high.

In Berkshire's annual letter from March, Buffett said he believed investing in good businesses is still the best use of cash over the long term. However, he noted that given its size, Berkshire isn't able to nimbly make large investments, so it needs to get them right the first time.

As for Berkshire's Q2 results, they were nothing to write home about. After-tax operating profit fell 4% to $11.2 billion, but that was largely due to currency swings. The company saw strength at its Burlington Northern Santa Fe railroad, where operating income climbed 20%, while its utility portfolio saw a 7% jump in profit. Its insurance underwriting profit, however, sank 12%. Meanwhile, it warned that the one big beautiful bill signed into law could hurt its utility business due to a reduction in tax credits for renewable energy. Berkshire's utility business has one of the largest portfolios of wind farms in the country.

Bull and bear statues on a phone displaying a stock trading app.

Image source: Getty Images.

Should investors follow Buffett's lead?

Buffett is clearly cautious about the stock market at this time, including his own company's stock. He's been reducing Berkshire's equity positions while also not buying back stock. That combination has led to Berkshire having a mountain of cash at its disposal, which he hasn't felt inclined to use.

If Buffett thinks Berkshire stock is overvalued and doesn't want to buy it, I think that is a good indication that investors shouldn't be piling into it at this moment. If he starts buying back shares again, then investors can return to more aggressively buying the stock for themselves.

As for the market as a whole, I would not recommend trying to time the market for the average investor. The best course of action is to still follow a simple dollar-cost averaging strategy, where you invest a set amount each month. Exchange-traded funds (ETFs) can be a great vehicle for this strategy, as can Berkshire stock itself, as it is a sound collection of businesses and stocks.

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1 Warren Buffett Stock to Buy Hand Over Fist in July

Key Points

  • Warren Buffett tends to buy well-run companies and hold them for the long term.

  • Even well-run companies fall out of favor on Wall Street.

  • With a 4.7% yield, this high-yield stock is built to survive whatever comes its way.

Warren Buffett has built an incredible track record running Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). And he did it using simple-to-understand logic: Buy well-run companies when they look attractively priced and then hold for the long term (so you can benefit from the growth of the business over time). But even well-run companies fall out of favor, and that's why this Buffett stock, with a lofty 4.7% dividend yield, is worth buying in July.

Two oil picks with different industry approaches

Energy stocks are currently suffering through a period of volatility thanks to geopolitical tensions. That's not unusual at all. The energy market is known for being volatile, and so are most stocks in the energy sector. Buffett has two energy investments, Occidental Petroleum (NYSE: OXY) and Chevron (NYSE: CVX). They have materially different industry positions.

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Warren Buffett.

Image source: Getty Images.

Oxy, as it is more commonly known, is focused on growing its business as quickly as practicable so it can better compete with established industry giants like, well, Chevron. Chevron, an industry giant, is focused on slow growth and -- here's the key for investors -- surviving through the inherent ups and downs of the energy sector. The second bit is why Chevron is so attractive as July gets underway.

There are three parts to Chevron's story. The one that will likely be most interesting to investors is its reliable dividend. The integrated energy giant has increased its dividend year in and year out for 38 consecutive years. That's an incredible streak given the price swings that have occurred in oil over that span. The company is, clearly, focused on rewarding investors for sticking around.

The interesting part is that this reliable dividend stock's dividend yield gets attractive during the tough times. Right now is a tough time thanks to both industry issues and some company-specific problems. History suggests Chevron will muddle through and continue to pay its dividend. In the meantime, investors can collect a hefty 4.7% dividend yield.

What backs Chevron's lofty yield?

A big yield that gets reliably paid is nice, but it doesn't fully explain why Buffett has Chevron in Berkshire Hathaway's portfolio. Which is where the next two parts of the Chevron story come in.

First, Chevron is an integrated energy giant. That means that it has exposure to the entire energy value chain, from producing oil and natural gas, to transporting the commodities, to processing them into other products. Each segment works a little differently through the energy cycle. Having exposure to all of them helps to smooth out performance over time. On top of that diversification, Chevron also has a global portfolio. So it can shift its investments to where they will have the best opportunity for success.

CVX Debt to Equity Ratio Chart

CVX Debt to Equity Ratio data by YCharts

That's a solid start, but there's another important factor. Chevron also has one of the strongest balance sheets in the energy patch, with a debt-to-equity ratio of just 0.2 times. That gives management the leeway to add debt during industry downturns so it can continue to support the business and dividend through hard times. When commodity prices recover, as they always have historically, it pays down its debt in preparation for the next downturn.

Buy Chevron when others are selling the stock

Chevron's stock is down around 20% from its 2022 highs, when oil prices were much higher. Long-term dividend investors shouldn't get too hung up on the downturn or the reasons why. Chevron is built to survive whatever comes its way. It probably makes more sense to just follow Buffett's "simple" approach and buy this well-run company while it is attractively priced and then hold it for the long term.

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Reuben Gregg Brewer has positions in TotalEnergies. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool recommends BP and Occidental Petroleum. The Motley Fool has a disclosure policy.

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If Iran Closes the Strait of Hormuz, These 3 U.S. Oil Stocks Could Soar

While it appears as though a temporary ceasefire may be on the horizon, the war between Israel and Iran is likely to linger into the future, with the U.S. now involved to a degree after last weekend's bombings of Iran's nuclear facilities.

If things were to re-escalate, the Iranian regime could take a worst-case, most damaging counter-measure by blockading the Strait of Hormuz, the narrow waterway between Iran and Oman through which 21% of the world's oil consumption flows.

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If that were to happen, oil prices would spike in the short term and stocks would probably move lower. However, the following U.S.-focused oil and gas giants would each benefit, with one being a Warren Buffett favorite.

Foreman points at an oil rig in the distance.

Image source: Getty Images.

ConocoPhillips

ConocoPhillips (NYSE: COP) is one of the largest U.S.-based oil and gas giants, which also has a very high concentration of its exploration and production in the United States. Although ConocoPhillips is diversified geographically, about 75% of its operating earnings come from the contiguous U.S., Canada, and Alaska. The next largest segment is in the Pacific, across China, Malaysia, and Australia.

A remaining 12.5% or so of its earnings comes from Europe, Middle East, and North Africa. While ConocoPhillips does have some production in Qatar, which would be affected by the closing of the Strait of Hormuz, that production is just a portion of this segment, and thus a small fraction of Conoco's overall production.

Conoco currently trades fairly cheaply, at just 11.6 times earnings with a 3.4% dividend yield, reflecting a low-growth outlook. However, if oil prices were to spike, management says that for every $1 increase in the price of Brent crude oil, Conoco would increase its operating cash flow by $65 million to $75 million. For every $1 increase in West Texas Intermediate, Conoco would see an additional $140 million to $150 million.

Conoco gives investors the strength of a very large-cap oil company with an excellent balance sheet and relatively low debt for its size, at less than equal to EBITDA. So it's a risk-off play for those who nevertheless would like concentrated exposure outside the Middle East.

EOG Resources

EOG Resources (NYSE: EOG) is present in most of the major shale plays in the United States, along with exploration properties in Trinidad and Tobago. As a 100% U.S.-based producer, EOG's cargos obviously don't flow anywhere near the Strait of Hormuz.

EOG has also been an excellent operator, having steadily ramped its cash flow, and along with it, total shareholder returns. Between 2021 and 2024, EOG has more than doubled its dividend, which now yields 3.3%, while also adding share repurchases. In that same time span, EOG has increased its total shareholder payouts, dividends and repurchases included, from 48% of free cash flow to 98%.

EOG has also been able to garner higher-than-average oil and gas price realizations than its peers, thanks to its well positioning near low-cost pipelines and storage operators, which enables EOG to realize more of its oil and gas sales than others. That means if the price of oil spikes on a Middle East geopolitical conflict, EOG Resources could disproportionately outperform.

EOG has been able to return so much cash to shareholders because of its excellent balance sheet, which is actually unlevered, with more cash than debt. As such, it's another low-risk way to play U.S. shale.

Occidental Petroleum

A third great option for U.S.-focused investors is Warren Buffett holding Occidental Petroleum (NYSE: OXY). Although Occidental does have some of its production in the Middle East, specifically Oman, which would be affected by any closure of the Strait of Hormuz, about 84% of its production comes from the U.S., with over half of its total production concentrated in the oil-gushing, low-cost Permian Basin in West Texas, where Occidental has 2.9 million acres of land.

Occidental's onshore inventory is also very deep, with 13 years of production at the today's rates at breakeven prices below $60 per barrel, with 10 years of inventory with breakeven costs under $50, and a good portion of those wells having breakeven costs below $40.

Meanwhile, Occidental has a history of lowering costs over time, opening up more of its inventory. On the recent earnings release, Occidental management noted that it had reduced well costs by 12% across its U.S. fracking portfolio since 2023.

As the company with some of the deepest inventory in the Permian Basin, Occidental is very well positioned for the long term, which is probably why Buffett is such a fan. And of course, if non-U.S. supply was cut off for any reason, because of the closing of the Strait of Hormuz or some other geopolitical event, Occidental would be a prime beneficiary.

That being said, Occidental also has a higher debt load than the other companies mentioned, especially after its $12 billion acquisition of CrownRock last year. So that's something for investors to monitor. However, should the price of oil spike, Occidental may have more upside as a leveraged play on U.S. oil and gas.

Should you invest $1,000 in Occidental Petroleum right now?

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Billy Duberstein and/or his clients have positions in ConocoPhillips. The Motley Fool has positions in and recommends EOG Resources. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

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Does Warren Buffett Know Something That Wall Street Doesn't? The Billionaire Has Spent Years Piling Into Oil and Gas Stocks Despite Experts Advising Caution.

While Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) sometimes will move in and out of stocks on a short-term basis, the company -- led by famed CEO Warren Buffett -- is largely considered a long-term investor.

This can sometimes make it difficult to immediately understand why Buffett and his team are buying a stock or a group of stocks because their thesis could still be several years away from playing out. The companies they buy may have underperformed recently and also may not screen well.

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In recent years, Buffett and Berkshire have loaded up on energy assets, including oil and gas stocks, even as many industry experts have expressed caution about the price of oil. Does Buffett know something that Wall Street doesn't?

Berkshire's oil and gas acquisitions

Although Berkshire invests in a range of different sectors from banking to tech and artificial intelligence, it's clear that Buffett and his team have been bullish on the energy sector for a number of years now.

Warren Buffett.

Image source: The Motley Fool.

In 2020, Berkshire announced it would spend $10 billion (including the assumption of debt) to purchase the natural gas assets from Dominion Energy, which included all of Dominion Energy Transmission, the Questar Pipeline, and Carolina Gas Transmission. The deal also included half of the Iroquois Gas Transmission System and 25% of the natural gas export-import and storage facility Cove Point LNG.

Last October, in a year where Berkshire hardly put any of its massive cash hoard to work, Berkshire announced it would purchase the remaining 8% of Berkshire Hathaway Energy that it didn't already own.

In its massive equities portfolio, Berkshire has also been busy buying domestic U.S. oil and gas stocks. In 2019, Berkshire purchased its first stake in Occidental Petroleum (NYSE: OXY) by providing the company with $10 billion in financing for an acquisition, in return for preferred shares and warrants. Berkshire hasn't slowed its buying since and now owns nearly 27% of outstanding shares. Occidental makes up 4.3% of Berkshire's portfolio and is the company's sixth largest position.

Berkshire also owns nearly 7% of outstanding shares in Chevron (NYSE: CVX), a position it first launched in 2020. Chevron is Berkshire's fifth-largest equity holding.

By all indications, I would expect Berkshire to keep investing in energy and utility stocks and assets. When Buffett retires from the CEO role at the end of this year, Greg Abel will succeed the 94-year-old, and Abel has run Berkshire Hathaway Energy for a number of years.

What does Buffett know?

Occidental Petroleum and Chevron have not performed well since the beginning of 2020, significantly underperforming the broader market.

CVX Chart

CVX data by YCharts

Oil prices have struggled over the last several years for a variety of reasons. Prior to President Donald Trump's current administration, there had been more of a focus on alternative energy and electric vehicles, as more people have grown increasingly concerned about climate change and its effect on the world. There have also been concerns about global demand for oil and the supply and demand dynamics.

The Organization of the Petroleum Exporting Countries and its allies have announced plans to increase production in an effort to retain and reclaim market share from countries it believes are producing too much oil. Meanwhile, the U.S. has significantly increased its fracking and drilling production over the last 15 years and saw oil production last year hit a record 13.4 million barrels per day, which also likely had an impact on supply.

Earlier this year, the U.S. Energy Information Administration (EIA) predicted Brent crude oil prices would average about about $66 per barrel this year and about $59 per barrel in 2026, compared to $81 per barrel in 2024.

So why are Buffett and Berkshire so interested in oil and gas assets? One reason may be geopolitical tensions. Relations in the Middle East have been fragile for many decades now. More recently, there has been significant escalation in the region due to the Israel-Gaza war and the growing conflict between Israel and Iran. Following Israel's recent and surprising strike on Iran's nuclear and military facilities, the price of oil surged to one of its highest in years.

Oil and gas are also viewed as finite resources. In a 2023 report, the EIA estimated that there is enough global supply of crude oil, liquid hydrocarbons, and biofuels to power the world's demand for liquid fuels through 2050. While technology can always change things, growth is expected to slow in the Permian Basin, one of the largest sources of oil production in the U.S.

Buffett and the Berkshire team may view holding U.S. energy assets as quite valuable if supply erodes and alternative energy sources can't fill the gap. Or perhaps they view companies like Occidental and Chevron as candidates to move into alternative energy sources.

Either way, it may not be a bad idea for investors to take a page from Buffett's playbook and build some exposure to U.S. oil and energy assets. These can serve as a hedge if oil prices surge due to escalating conflicts in the Middle East or if supply becomes constrained.

Should you invest $1,000 in Berkshire Hathaway right now?

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*Stock Advisor returns as of June 9, 2025

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

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Why Buffett Holding Occidental Petroleum Rallied Today

Shares of Buffett holding Occidental Petroleum (NYSE: OXY) rallied 6.2% in Thursday trading.

Occidental reported earnings last night, with mixed results. However, investors focused on the profit metric, as Occidental displayed resilient production metrics with more efficient costs. Furthermore, and perhaps even more meaningful than the earnings report, oil stocks were generally up, as the administration announced a trade deal with the U.K. today, spurring optimism that a global tariff-induced recession may be avoided.

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Occidental does more with less

In the first quarter, Occidental reported revenue of $6.8 billion, up 13.7% year over year, and $0.87 in adjusted (non-GAAP) earnings per share (EPS). While the top line slightly missed, investors apparently took comfort in the solid bottom line, which beat expectations by a solid $0.11.

One can thank Occidental's technology chops for more efficiently turning profits, even in a lower oil price environment. In the company's presentation, management noted a 17% improvement in drilling duration per well in the Permian Basin, resulting in 18% lower costs per well. Management also divulged that as a result of efficiencies, it was reducing its Permian rig count by two, and also said it was lowering combined operating and capital expenditures by $350 million this year, with only "minimal" impact to production.

Of note, it was Occidental's huge, low-cost inventory in the Permian along with its commitment to technology enabling lower costs that drew Buffett to invest in the stock.

The lower costs were music to investors' ears, who have worried about profitability in the wake of President Donald Trump's tariff announcements. Since April 2, the price of oil has plunged as recession odds have increased.

However, there was also optimism over tariff and trade negotiations today, as Trump announced the administration's first trade deal, made with the U.K. In a press conference announcing the deal, Trump also said other deals were close to coming to fruition, and that this weekend's initiation of trade talks with China would be "very substantive," saying the current tariff on China "can't go any higher."

In response to the trade deal optimism, the price of oil rose 3.3%. That being said, today's oil price is still a hair below $60 per barrel. In the first quarter, Occidental realized an average price of $71.07.

An oil rig in a field at sunset.

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Occidental has been a Buffett laggard

The current share price of Occidental is lower than Buffett's average price, so investors may realize an opportunity if Buffett turns out to be right on the name. That being said, it's still looking like oil and gas stocks may struggle this year.

After all, even if trade deals are struck, the universal 10% tariff on most countries will stick and is new this year, which could slow economic activity. Add in the fact that OPEC+ just increased its production quota two days ago, and the global oil industry appears on the verge of a price war.

That being said, Occidental appears to be one of the most efficient U.S. producers with lots of reserves in the Permian Basin. So, it should remain a strong house, but perhaps on a bad block, in 2025.

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

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