Why did Occidental Petroleum stop adding new oil hedges in 2024?

Occidental Petroleum stopped adding new oil hedges in 2024 because escalating volatility in crude prices following the Iran war caused prices to rise sharply—Brent crude surged 94% to $118.35 and U.S. WTI rose 76.6% to $101.38 by March 31—making further hedging unattractive; as CFO Sunil Mathew stated, 'As volatility increased, prices moved higher, we stopped adding new hedges and do not intend to do more.'

What were the terms and timing of Occidental's existing oil hedges, and how did they affect first-quarter earnings?

Occidental placed hedges covering 100,000 barrels of oil per day from March through December 2026 using costless collars with a floor of $55 and ceiling of approximately $76 per barrel of U.S. WTI crude; these derivative-related losses had a partial impact on its first-quarter profit, though the company still beat Wall Street expectations, and its realized oil price fell to $69.91 per barrel from $71.07 a year earlier.

Occidental Scraps New Oil Hedges as Iran War Fuels Price Volatility

May 6, 2026

Occidental Petroleum halted new oil hedging amid price volatility triggered by the Iran war, citing increased downside risk. Although derivative losses affected Q1 profits, the producer still beat Wall Street expectations despite realized prices falling.

reuters

2026-02-25

Occidental Petroleum Releases Q4 Earnings Report

2026-05-06

Occidental Scraps New Oil Hedges as Iran War Fuels Price Volatility

Occidental Scraps New Oil Hedges as Iran War Fuels Price Volatility

FAQ