• Occidental Petroleum shares have dropped 29% since mid-April, impacting Warren Buffett’s stake in the company.

• The decline aligns with a 23% drop in crude oil prices on concerns about demand and excess supply.

• Berkshire Hathaway’s $13 billion stake in Occidental Petroleum may be underwater, based on estimates.

A gradual decline in oil prices this yr has led to considered one among Warren Buffett’s big stock bets to point out sour.

Shares of Occidental Petroleum have plunged 29% since mid-April and are down 15% year-to-date, trading just above the $50 level on Thursday at 10:04 a.m.

The price decline in Occidental shares has coincided with a 23% decline in crude oil prices since mid-April.

Oil has been under pressure due to demand concerns tied to a cooling US economy and excess supply due to record production by US oil firms.

The sharp decline in Occidental Petroleum stock is a blow to Warren Buffett’s Berkshire Hathaway, which has been amassing a stake throughout the oil producer since early 2022.

Buffett went on a buying streak of Occidental Petroleum in June, purchasing tens of thousands and thousands of shares across the $60 level. The conglomerate owns a 29% stake throughout the oil company, value about $13 billion.

The $55-$60 level has acted as a floor for Occidental Petroleum stock since Buffett began buying it in 2022, but for the first time in greater than two years, that floor has been taken out.

The hedge fund tracking website HedgeFollowe estimates that Berkshire Hathaway paid a mean price of $51.22 for its stake, which is about 1% above the stock’s current price.

To be clear, the everyday price Berkshire Hathaway paid for its Occidental Petroleum stake is just known by Berkshire Hathaway itself.

One other sign that Berkshire Hathaway’s Occidental Petroleum bet is souring is based on the warrants it owns to purchase additional shares.

Chris Bloomstran, fund manager of Semper Augustus and longtime investor in Berkshire Hathaway, told Business Insider that Buffett owns warrants to buy one other 83.5 million shares of Occidental Petroleum at a strike price of $59.62, which is form of 20% above the current price.

As as to if Buffett will profit from the recent dip in Occidental Petroleum shares and buy, it’s possible, in accordance with Bloomstran, but he won’t take over the company.

“I might not rule out a purchase order order of additional shares,” Bloomstran said, highlighting that the conglomerate has a great deal of “firepower” given its recent sales of Apple and Bank of America stock.

“Warren has said he won’t buy all the company and I don’t think he’ll change his mind on that,” Bloomstran added.

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Buffett likely desires to see Occidental Petroleum initiate a stock buyback program of its shares, in accordance with Bloomstran, but Occidental CEO, Vicki Hollub, said the company wouldn’t do that until it’s paid down an unlimited chunk of its outstanding debt.

On Occidental Petroleum’s latest earnings call, Hollub said the firms desires to pay down its debt to $15 billion before initiating a stock buyback, which could possibly be “doable by the tip of 2026 or first of 2027.”

Read the unique article on Business Insider