Occidental Petroleum CEO Vicki Hollub shared a confident yet measured outlook for oil markets this week at the Energy Intelligence Forum in London, forecasting a period of price stability followed by a tightening market later in the decade.
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Steady Prices Ahead, Bullish Outlook Beyond 2026
Hollub expects oil prices to remain within a $58 to $62 per barrel range through 2026, describing the near-term environment as relatively balanced. But beyond that horizon, she sees growing potential for upward movement.
“I remain very bullish on oil prices — not this year or next, but I’m bullish on oil prices,” she said, emphasizing that supply constraints could tighten the market after 2026 as global investment lags behind demand growth.
Her comments align with a broader consensus among U.S. producers that structural underinvestment in new supply — combined with growing global energy demand — will set the stage for a tighter market in the back half of the decade.
Oxy 2025 Drilling as Activity Consolidates Across Key Basins
Drilling activity across North America continues to show clear signs of consolidation heading into late 2025. Data from well licenses and drilling reports reveal that Precision Drilling has emerged as the standout performer this year, with rigs 562 and 564 leading the field and completing a combined 70 wells—the most active rigs in the dataset.
NorAm Drilling also maintained a strong presence with rigs 27 and 34, while AKITA 524 rounded out the top five. These rigs exemplify the industry’s move toward fewer, more efficient operations—where a handful of high-performing assets now account for a majority of total activity.
Regionally, Loving County, Texas, continues to dominate with 118 wells drilled, followed by Weld (78), Reeves (59), Howard (54), and Eddy (50) counties. This distribution highlights the ongoing strength of the Permian Basin, supported by robust midstream infrastructure and steady demand from LNG and petrochemical growth along the Gulf Coast.
Overall, total wells drilled declined modestly year over year—803 in 2023, 664 in 2024, and 547 in 2025—signaling a plateau in drilling intensity even as operators continue to invest in technology, automation, and high-efficiency rigs. The data suggest that while rig counts have fallen, productivity per rig remains near record levels, a trend aligned with broader industry discipline and capital efficiency goals.
In short: 2025 is defined by smarter drilling, not just more drilling. Contractors like Precision, NorAm, and AKITA are proving that performance and efficiency—not volume—now define success in the U.S. shale landscape.
U.S. Oil Output Nearing Its Peak
Hollub also suggested that U.S. oil production will likely peak between 2027 and 2030, marking a potential turning point for global supply dynamics. The forecast hints at the end of a long era of shale-driven growth, with operators increasingly focused on shareholder returns over production expansion.
If accurate, this would represent a strategic shift in the U.S. role as the world’s swing producer — a transition that could amplify price volatility in the years ahead.
A Leaner Occidental: Focus on Debt and Discipline
As part of Occidental’s five-year strategic plan, Hollub reaffirmed the company’s goal to more than double its share price through continued debt reduction and disciplined capital management.
Following the $9.7 billion sale of its OxyChem chemical division to Berkshire Hathaway, Hollub noted that Occidental “doesn’t need to do any more acquisitions.” The transaction strengthens the balance sheet but initially sparked a 7.5% decline in OXY shares, one of the steepest pullbacks in the S&P 500 during a recent energy sector selloff.
Analysts at Evercore ISI trimmed their price target from $40 to $38, citing short-term capital structure concerns but recognizing that the sale provides greater long-term financial flexibility.
Long-Term Confidence in the Core Business
Despite market jitters, Hollub’s remarks reinforced confidence in Occidental’s fundamentals — from its cash-generating Permian portfolio to emerging carbon capture and storage (CCS) investments through Oxy Low Carbon Ventures.
Her bullish stance mirrors broader sentiment among peers like ExxonMobil, Chevron, and ConocoPhillips, who see a tightening supply outlook developing beyond the current flat-price environment.
Bottom Line:
Vicki Hollub’s comments signal a steady hand and long-term conviction in oil markets. While Occidental navigates near-term headwinds, its focus on balance sheet strength and disciplined growth positions it for leverage when — not if — global supply tightens again.
