I'll research OXY thoroughly before writing the preview. Let me start by gathering recent earnings materials, filings, and news.Let me read the most recent quarter's earnings call and release, plus check for recent news.Let me get recent news, stock price performance, and any analyst/estimate context.I have what I need. Let me write the preview.

Occidental Petroleum (OXY) — Q2 2026 Earnings Preview

Report date: Wednesday, August 5, 2026 (after close) | Call: 2026Q2 Earnings Call Stock (8/4/26 close): ~$55.11 | YTD: ~+30% | Off March peak (~$66): ~-17%

The one-sentence setup

This is the first quarter reported entirely under new CEO Richard Jackson (Vicki Hollub retired June 1), it lands into a war-driven oil spike, and the central tension is simple: OXY should print a big commodity-price tailwind, but hedges, production headwinds, and PSC math will bleed off a chunk of it — so the "beat quality" and the deleveraging trajectory matter more than the headline EPS.

1. Macro backdrop — the dominant variable

The quarter was defined by geopolitics, not fundamentals. A US/Israel–Iran conflict that escalated on Feb 28 has kept crude elevated and extremely volatile through Q2 and into the print: - Oil posted its biggest monthly gain since March, up more than 21% in July, with Brent near $88 and WTI below $83 as the conflict strained supply. - The Strait of Hormuz has been largely avoided by shipping, and Iran has threatened to strike Gulf energy infrastructure (Saudi/UAE oil fields, Qatari gas) if the US attacks its energy assets — directly relevant to OXY's Al Hosn (Abu Dhabi), Dolphin (Qatar gas), and Oman assets. - Prices whipsawed on de-escalation hopes (Brent dipped toward ~$80s on a fighting pause) and re-escalation.

Why it matters for OXY: Q1 2026 WTI averaged $71.93; Q2 realized prices should be materially higher. But two things blunt the upside — the hedge collar and PSC accounting (below).

2. Commodity leverage vs. the hedge cap — watch derivative losses

Management put on costless collars covering 100,000 bbl/d of oil from March through December 2026, with a $55 WTI floor and a ~$76 WTI volume-weighted ceiling. With WTI running in the $80s for much of Q2, that ceiling is in the money against OXY on the hedged barrels.

Q1 already showed a $339M domestic crude derivative loss (pre-tax) as prices ran in March.
Expect another sizable mark-to-market/settlement derivative drag in Q2, which will widen the gap between reported and adjusted EPS and cap realized upside on ~7% of oil volumes.
Management explicitly said it stopped adding hedges and does not intend to do more — so this is a fixed, known drag, not a growing one.

Takeaway: Don't be surprised by messy reported EPS. Focus on adjusted EPS, cash flow, and realized prices net of hedges.

3. Production — expect a soft sequential quarter (by design)

On the Q1 call, management guided to several discrete Q2 headwinds and cut the full-year production midpoint to 1.44 MMBoe/d: - Al Hosn operational constraints (began mid-March, expected to normalize by end of Q2) — Middle East disruption. - Higher prices → lower net PSC volumes (international production is reduced under production-sharing contract mechanics when prices rise). - EOR portfolio optimization — divesting scattered non-core fields while adding working interest in core floods; modestly lowers EOR volume but is described as FCF-accretive and margin/decline-improving. - By area: Permian unconventional up, Rockies roughly flat, Gulf of America down modestly (planned maintenance + start of tropical weather/hurricane season).

What to watch: Whether domestic outperformance (Permian/Rockies uptime) again offsets international/EOR drags, as it did in Q1 (domestic beat guidance midpoint by 33 Mboe/d). OXY has beaten the high end of production guidance repeatedly — a streak the market now expects.

4. Deleveraging & capital allocation — the real catalyst

This is arguably the most important storyline. OXY has been paying down debt aggressively, funded partly by the ~$9.5B OxyChem sale proceeds (closed in Q1, drove the $3.13 reported EPS via a discontinued-ops gain): - Principal debt cut from ~$20.8B (Q3'25) → $13.3B, already below the prior $14.3B target. - Interest run-rate now ~$845M/yr, ~$550M lower than 2025. - Near-term priority: reach $10B principal debt. With elevated oil generating strong FCF, this milestone could be hit this year — a potential positive catalyst and the gate to the next capital-allocation phase.

Key question for the call: What happens after $10B? Management has flagged options — build cash toward the August 2029 preferred redemption (the ~$8.3B Berkshire preferred, ~$679M/yr dividend), further debt reduction, opportunistic buybacks, or measured reinvestment. Investors (per the Q1 Q&A) are pushing for a more formulaic shareholder-return framework; management continues to resist, preferring flexibility. Watch for any hardening of the buyback stance and dividend-growth signaling (dividend was raised to $0.26/qtr in Q1).

2026 target: >$1.2B of incremental FCF vs. 2025 before price benefits; longer-dated plan to grow FCF further by 2029 via cost cuts, lower base decline (<20% by end of decade), midstream/LCV, and lower interest.

5. Midstream — a genuine tailwind

Often overlooked, this was a Q1 standout and guidance was raised hard: - Full-year midstream/marketing guidance lifted to ~$1.1B (+~$800M). - Q2 strength expected from the wide Waha-to-Gulf Coast gas spread (gas marketing optimization) and crude marketing/timing gains. - Offset: Al Hosn sulfur sales disrupted by Middle East logistics (expected to normalize in 2H). - Watch for management to reiterate that the Waha spread narrows later in 2026 as new pipeline capacity comes online.

6. Capital spending & costs

FY26 capex maintained at $5.5–$5.9B; Q2 capex expected to be higher than Q1's ~$1.5B (front-half-weighted program).
Domestic LOE guidance maintained (~$7.85/BOE Q1) — higher CO2 costs from higher oil prices offset by EOR optimization benefits.
On track for ~$500M of additional oil & gas cost savings in 2026 and ~7% new-well cost improvement. Watch for any service-cost inflation commentary (rigs/frac), though management said it does not threaten the capex range.

7. Management transition & strategy tone

Richard Jackson's first full quarter as CEO. Expect continuity: organic development of the "30-plus year" resource base, cost efficiency, lower base decline, and disciplined returns. Management has explicitly downplayed the need for large M&A ("very focused on organic development").
Watch how Jackson frames the "value at any price" pitch and whether he offers any incremental detail on the 2029 FCF bridge or reinvestment triggers.

8. STRATOS (Direct Air Capture) — update due

Phase 2 construction complete; Phase 1 commissioning revealed an issue with non-process components (not the DAC technology itself). Management promised a repair-timeline and schedule-impact update on this (Q2) call. Said it won't affect the 2026 capex range, but any slip in the operational timeline is a watch item for the low-carbon narrative.

9. Stock setup & positioning

OXY tracked crude's round-trip: ran from ~$42 (Jan) to a ~$66 peak in late March, sold off to ~$48 in early July, and has recovered to ~$55.
Performance has been roughly in line with the energy sector (XLE) YTD, i.e., OXY is trading as a high-beta oil proxy rather than on idiosyncratic re-rating.
With sentiment now driven by war headlines, the risk is binary: a Middle East de-escalation could pressure both oil and the stock even on a good print, while continued conflict keeps the FCF/deleveraging story compounding.

Scorecard — what will move the stock

Watch item	Bull signal	Bear signal
Adjusted EPS / realized prices	Higher oil flows through despite hedges	Hedge/PSC drag larger than expected
Production	Domestic beat offsets ME/EOR headwinds again	Al Hosn/GoA weakness misses 1.44 MMBoe/d path
Principal debt	Line of sight to $10B this year	Working-capital/FCF slippage delays it
Capital returns	Buyback re-start / clearer framework post-$10B	Continued "opportunistic only" vagueness
Midstream	Reaffirms/raises ~$1.1B FY	Sulfur/Waha weakness
STRATOS	Contained repair, on-schedule	Meaningful operational delay

Bottom line: Q2 should showcase OXY's cash-generation and deleveraging in a high-price environment, with the OxyChem-cleaned balance sheet the strategic centerpiece. The nuances — hedge losses capping upside, PSC/Al Hosn/EOR trimming volumes, and a new CEO's capital-allocation tone — are where the report will be won or lost. Given the stock now trades on Iran/Hormuz headlines, the durability of the oil rally may matter as much as anything management says.

Note: figures and guidance above are drawn from OXY's Q1 2026 release/call (May 2026) and market/news data through Aug 4, 2026; actual Q2 results and any updated guidance will supersede these expectations.