Oil Prices Slide as U.S. and Iran Near Landmark Deal to Reopen Strait of Hormuz

Occidental Petroleum (NYSE: OXY) experienced significant selling pressure on Thursday, with shares dropping as much as 8.6% during intraday trading. The decline was driven by a sharp correction in global oil prices, which fell approximately 10% to roughly $82 per barrel, the lowest level recorded since early March. The market volatility follows statements from President Trump indicating that the U.S. and Iran are close to a deal to end their ongoing conflict. A central component of the agreement involves the reopening of the Strait of Hormuz, a vital maritime chokepoint that handles roughly 20% of the world's oil supply, which had been restricted since the start of the war. Iranian Foreign Minister Abbas Araghchi confirmed that the Strait is declared open for the duration of the ceasefire, subject to certain conditions. Additionally, reports indicate the U.S. is considering the un-freezing of $20 billion in Iranian assets in exchange for the surrender of enriched uranium and a suspension of Iran's nuclear program. As a pure-play upstream producer with substantial debt on its balance sheet, Occidental is highly sensitive to fluctuations in crude prices. This sensitivity was further amplified following the company's earlier sale of its midstream chemical division to Berkshire Hathaway, leaving it more exposed to commodity price swings than some of its diversified peers. Despite the immediate decline, oil prices remain notably higher than the low-$60s seen at the beginning of 2026. This elevated price environment may still provide Occidental with a window of profitability to aggressively pay down its debt and potentially improve its valuation multiple over the medium term.