Key Takeaways
- Occidental Petroleum (OXY) plans to prioritize debt reduction and the redemption of preferred equity over share buybacks, while forecasting flat production for 2027.
- The company will reduce its Permian Basin rig count by three units in Q4 2024 but expects to bring 15 more wells online during the same period.
- U.S. officials declared the Strait of Hormuz an international waterway that must remain free of tolls and impediments, countering recent Iranian threats to ban Western shipping.
- Ukrainian President Volodymyr Zelenskiy is scheduled for a historic visit to Serbia on August 8, marking a significant diplomatic shift for the traditionally Moscow-aligned nation.
Occidental Prioritizes Financial Discipline and Debt Reduction
Occidental Petroleum (OXY) executives outlined a conservative capital allocation strategy during their Q2 2026 earnings conference call. The company announced that any continuous share buyback program will remain a lower priority until it completes the redemption of preferred equity. CFO Sunil Mathew indicated that the firm will lean toward aggressive debt reduction if the current macro environment remains supportive.
For the fourth quarter of 2026, the energy giant expects to drop three rigs in the Permian Basin while simultaneously bringing 15 additional wells online. Looking further ahead, Occidental projected 2027 capital spending of $5.9 billion, with production levels expected to remain flat compared to 2026. The company also confirmed that full plant commissioning for its Stratos direct air capture project is slated to begin by late 2026.
U.S. Reaffirms Open Access to Strait of Hormuz
A senior U.S. official emphasized that the Strait of Hormuz is an international waterway and that no single party has the authority to control its shipping lanes. The statement follows reports from Iranian state media suggesting a potential ban on U.S. and Israeli vessels, a move that briefly triggered a spike in global oil prices.
The official clarified that any "temporary routes" established through the strait must operate without impediments, meaning no requirements for approvals, permissions, or tolls. This stance reinforces the U.S. commitment to freedom of navigation in the region, which handles approximately one-fifth of the world's traded oil and natural gas.
Diplomatic Shifts: Zelenskiy to Visit Serbia
In a notable geopolitical development, the office of Serbian President Aleksandar Vucic confirmed that Ukraine's Volodymyr Zelenskiy will visit Serbia on August 8. This marks a rare high-level meeting between the two leaders on Serbian soil, as Belgrade has historically maintained close ties with Russia while seeking European Union membership.
The visit is seen as a pivotal moment for Balkan diplomacy, potentially signaling a further distancing of Serbia from Moscow's influence. Discussions are expected to center on regional security, humanitarian aid, and Serbia's stance on the ongoing conflict in Ukraine.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.