The last few years have been rough for the oil and gas sector. Mounting environmental pressure and imbalances in the rates of supply and demand have pushed Brent crude oil to fall to less than $65 per barrel throughout 2025 so far, down from $81 in 2024.
However, despite a ramping up in global oil production, both fundamental and technical indicators show that a bottom could be around the corner to relieve energy investors, a sentiment with billion-dollar backing by investors like Warren Buffett. Among energy shares experiencing price suppression, American oil innovators like Occidental Petroleum (NYSE: OXY) and Chevron (NYSE: CVX) could be primed for major growth.
Investor Confidence Indicates Positive Movements for Energy
Based on the current trajectory, Brent crude oil trends may lead investors to believe that prices could continue their downward trend. OPEC and OPEC+ began ramping up production in April of 2025, while production in the United States, Brazil and Guyana also soared. Global demand trends indicate that this will push supply and demand too heavily toward oversupply, leading to lower prices.
Despite these indicators, oil futures have remained optimistic. Brent crude futures climbed 0.5% to $65.15 a barrel on Thursday, while the United States Oil Fund (NYSEARCA: USO) is up more than 10% in the last month. While oversupply data likely hasn’t shown up in inventory yet, relatively strong fuel markets could be contributing to the market’s mixed signals.
On-again-off-again tariffs and an uncertain relationship between the United States and Iran are the two biggest wild cards contributing to the disparity between indicated supply and prices. President Donald Trump’s deadline could put more than 1.5 million barrels of Iranian oil at risk of sanctions if the two countries cannot reach a resolution, a move that could see prices surge by more than $10 per barrel. Energy prices as a whole may also be driven upward by growing AI energy requirements.
Technical analysis may also indicate that the next super cycle could be closer than investors think. Analysts suggested a $61.80 support and $64.10 resistance early Friday morning, which light crude oil futures broke above midday. This could indicate a buying opportunity for oil and gas investors after months of suppressed prices amid tariff concerns.
Chevron: An American Oil Leader
As demand for oil normalizes and resistance levels are tested, companies offering high-quality operators with scaling efficiency and shareholder-focused capital return strategies are poised for the best chance of success.
While shares of Chevron are down 3% so far this year, the company’s decision to focus on U.S. operations over its Venezuelan assets could mean less risk of tariff drama should increased demand materialize.
Chevron’s solid financials and earnings may also increase its favorability to investors. The company beat its last earnings estimate by $0.03 per share, and it maintains a 38-year record of dividend increases, a move likely to help retain investors and reduce volatility.
CVX also receives a regular vote of confidence from investing legend Warren Buffett, being a major component of Berkshire Hathaway’s portfolio. In May of 2025, the company held 6.8% of the oil giant's outstanding shares.
Buffett Boasts Increased Confidence in OXY
Occidental Petroleum is another American oil giant poised to benefit from a potential price boom. The company recently strengthened its U.S. asset holdings by acquiring Midland-based oil and gas producer CrownRock. Like Chevron, this increased focus on domestic operations put it at less of a risk of tariff interference.
OXY’s financials are solid, especially regarding debt repayment. After announcing a debt repayment target of $4.5 billion in the fourth quarter of 2024, Q1 earnings reveal that an additional $2 billion of debt has been repaid. The company beat its last earnings estimate by $0.13 per share, and it remains a solid and consistent dividend choice with a 2.26% annual yield as of June 2025.
Occidental is also another oil stock that’s gained a vote of confidence from Berkshire Hathaway. Buffett has aggressively expanded Berkshire Hathaway’s holdings of OXY, with the company now holding more than 28% of Occidental Petroleum's outstanding stock.
Along with this 28% stake, Berkshire Hathaway also owns $8.5 billion of Occidental preferred stock as well as warrants to purchase another $5 billion in shares, a significant vote of confidence for future operations.