Key facts
- Occidental Petroleum's average realized oil prices increased 38.4% in Q2.
- Higher crude rates and Middle East conflict drove the price surge.
- Brent crude averaged $96.68 per barrel in Q2.
- Occidental's realized oil price was $96.78 per barrel in Q2.
- Renewed U.S.-Iran strikes have increased the Middle East risk premium, lifting Brent above $76.
- Russia banned diesel exports for one month.
- Freeport LNG began an unplanned turnaround at its Texas liquefaction terminal.
Occidental Petroleum reported a significant increase in its average realized oil prices for the second quarter, with a 38.4% rise compared to the previous three months. This surge was attributed to higher benchmark crude rates, exacerbated by geopolitical risk premiums and supply disruptions in the Middle East due to the ongoing conflict involving Iran. Benchmark Brent crude saw its average closing price climb to $96.68 per barrel in the April-June quarter, a 23% increase from the first quarter. Occidental's worldwide average realized oil price reached $96.78 per barrel during the same period.
In contrast, the company's realized natural gas prices averaged negative 80 cents per million cubic feet in the second quarter, a substantial drop from $1.20 per mcf in the first quarter. Realized natural gas liquids prices, however, rose nearly 30% to $24.64 per barrel.
The broader oil market has seen a return of geopolitical risk premium, lifting global prices as renewed U.S.-Iran strikes have slowed traffic through the Strait of Hormuz and heightened fears of supply disruptions. Brent crude has settled above $76 per barrel amid these concerns. The International Energy Agency (IEA) has adjusted its 2026 demand drop expectations and anticipates a significant fall in world oil supply for this year due to ongoing disruptions.
Several countries are taking steps to manage energy supplies and reserves. India's ONGC will build a 13-million-barrel crude reserve, while Iran is rushing to export oil amid potential blockade threats. Russia has implemented a one-month ban on diesel exports to address domestic prices. Meanwhile, Turkey and Iraq have agreed to extend crude flows via the Kirkuk-Ceyhan pipeline for 12 months.
In terms of infrastructure and operations, Freeport LNG has begun an unplanned turnaround at its Texas liquefaction terminal, expected to last until late August. Separately, Ukraine's army attacked a Chevron-chartered oil tanker in the Black Sea. QatarEnergy has paused efforts to restart production at its LNG facilities following an attack on an LNG carrier.