Warren Buffett-backed Occidental Petroleum, Diamondback Energy, APA and Halliburton led an early rally in oil stocks Monday as oil prices jumped. The oil price move coincided with Ukraine's drone strikes on military airports in Russia, just ahead of the resumption of ceasefire negotiations between the two countries in Istanbul Monday.
U.S. oil prices advanced around 4% to more than $63 per barrel on Monday. Meanwhile, Brent futures, the international benchmark, also increased 4% to $65.25 per barrel. The move higher comes despite the Saudi Arabia-led Organization of Petroleum Exporting Countries and its allies, including Russia, announced Saturday it would raise oil output in July by the same amount as in the previous two months.
The oil cartel, OPEC+, agreed over the weekend, to add 411,000 barrels a day of supply. This means that By the end of July, OPCE+ will have brought back more than 60% of its planned supply increase of 2.2 million barrel per day, according to a Monday note from ING.
However, instead of driving U.S. oil prices lower — the expected move — prices actually increased on Monday. ING analysts Warren Patterson and Ewa Manthey wrote Monday that "rising tensions between Russia and Ukraine added further support to the market."
The analysts noted that Ukraine carried out drone strikes on several Russian military airfields just ahead of scheduled peace talks between the two countries this week. The ING analysts also noted that some U.S. senators were "pushing for harder" sanctions against Russia to keep the country's oil off the global market. This effort from U.S. lawmakers includes a proposal to impose 500% tariffs on imports from countries that purchase Russian oil, according to Dutch bank ING.
Reuters reported that shipments of Russian oil to India hit a 10-month high in May, at almost 1.8 million barrels per day.
"While President Trump appears to be increasingly frustrated with President Putin, he's so far been reluctant to impose additional sanctions," The ING analysts noted. "Actions that successfully target Russian oil flows will change the outlook for the oil market drastically."
Warren Buffett Stocks: What's Inside Berkshire Hathaway's Portfolio?
Warren Buffett: Oil Stocks
Several oil stocks moved higher Monday along with oil prices, even as they remain in long-term downtrends, according to MarketSurge charts.
Occidental Petroleum gained 1.6% to 41.44 during Monday's stock market action. The Warren Buffett stock hit a low of 34.78 on April 9, the lowest for the stock since 2022. OXY is below its 200-day moving average and is finding resistance at the 50-day line as it struggles to rebound in stock market trade.
Meanwhile, Diamondback Energy, a Permian Basin pure play, also advanced about 2.3% in market action on Monday. Devon Energy stock increased 2.9%. Oil-field service giant Halliburton moved 2.1% higher to 20.01 and APA gained 1.9% to about 17.33.
Fellow Buffett-backed energy play Chevron edged up around 0.9% during stock market trade on Monday. Supermajor Exxon Mobil gained 0.7% on Monday.
Chevron reported that in Q1 it acquired $2.2 billion of Hess stock, saying that this reflects "continuing confidence in the consummation of the pending acquisition of Hess." This move comes as Chevron awaits a court decision on its $60 billion Hess deal. Exxon, which operates the offshore Guyana project upon which Chevron's Hess deal hinges, claims it has the right of first refusal.
The arbitration hearing was held on May 29 and the panel is currently deliberating on the case. This can take up to around three months, according to observers.
Warren Buffett, who will step down from his role as CEO of Berkshire Hathaway at the end of the year, amassed a record level of cash on hand through the first quarter. However, a consistent Buffett buy over the past several years has been Occidental Petroleum.
Buffett's stake in Occidental Petroleum is now 28.2%, or $12.4 billion. Along with the 28.2% stake, Berkshire Hathaway also owns $8.5 billion of Occidental preferred stock and has warrants to buy another 83.9 million common shares for $5 billion.
Occidental Petroleum stock has a 39 Composite Rating out of a best-possible 99. The Buffett stock also has a 16 Relative Strength Rating and an 82 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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