Oil Companies Rally Amid Rising Prices and Geopolitical Tensions

Occidental Petroleum (OXY) surged 5% on Tuesday, mirroring gains across the oil sector as geopolitical tensions reignited supply concerns. The rally followed Ukraine's escalated drone attacks on Russian refineries, which reportedly reduced Russia's oil refining capacity to its lowest level since April 2022. Transneft, Russia's pipeline operator, has begun limiting storage capacity for state-backed oil companies, further straining global supply chains.

Crude prices climbed 2%, reversing a 9% year-to-date decline that had pushed benchmarks near $60 per barrel—far below the $139 peak seen after Russia's 2022 invasion of Ukraine. Market participants now weigh the potential for sustained price support if Western allies greenlight more aggressive targeting of Russian energy infrastructure. The Federal Reserve's impending rate decision adds another LAYER of macro uncertainty, with cuts expected to address softening labor data.