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DERIVATIVES
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES
NOTE 8 - DERIVATIVES

OBJECTIVE AND STRATEGY
Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations and transportation commitments and to fix margins on the future sale of stored commodity volumes. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Occidental may occasionally use a variety of derivative financial instruments to manage its exposure to foreign currency fluctuations and interest rate risks. Occidental also enters into derivative financial instruments for trading purposes.
Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased from a vendor or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes. The value of cash flow hedges was insignificant for all periods presented. See Note 1 - Summary of Significant Accounting Policies for Occidental’s accounting policy on derivatives.

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
As of December 31, 2024, Occidental’s derivatives not designated as hedges consisted of marketing derivatives. All interest rate swaps were settled prior to December 31, 2023.
Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled.

MARKETING DERIVATIVES
Occidental’s marketing derivative instruments not designated as hedges are short-duration physical and financial forward contracts. A substantial majority of Occidental’s physically settled derivative contracts are index-based and carry no mark-to-market valuation in earnings. As of December 31, 2024, the weighted-average settlement prices of these forward contracts were $71.07 per barrel and $3.50 per Mcf for crude oil and natural gas, respectively. The weighted-average settlement prices were $76.36 per barrel and $2.62 per Mcf for crude oil and natural gas, respectively, as of December 31, 2023. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales. Derivative settlements and collateralization are classified as cash flows from operating activities unless the derivatives contain an other-than-insignificant financing element, in which case the settlements and collateralization are classified as cash flows from financing activities.
The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives as of December 31:

20242023
Oil commodity contracts
Volume (MMbbl)(34)(20)
Natural gas commodity contracts
Volume (Bcf)(130)(113)

FAIR VALUE OF DERIVATIVES
Occidental has categorized its assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 – using quoted prices in active markets for the assets or liabilities; Level 2 – using observable inputs other than quoted prices for the assets or liabilities; and Level 3 – using unobservable inputs. Transfers between levels, if any, are reported at the end of each reporting period. The following table presents the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when derivatives are subject to netting arrangements, and are presented on a net basis in the Consolidated Balance Sheets.
millionsFair Value Measurements UsingTotal Fair Value
Balance Sheet ClassificationLevel 1Level 2Level 3
Netting (a)
December 31, 2024
Marketing Derivatives
Other current assets$455 $92 $— $(512)$35 
Other long-term assets— 1 — (1)— 
Accrued liabilities(451)(90)— 512 (29)
Deferred credits and other liabilities - other— (2)— 1 (1)
December 31, 2023
Marketing Derivatives
Other current assets$1,008 $100 $— $(1,009)$99 
Other long-term assets47 1 — (43)5 
Accrued liabilities(967)(64)— 1,009 (22)
Deferred credits and other liabilities - other(43)(6)— 43 (6)
(a)These amounts do not include collateral. Occidental netted $12 million of collateral received from brokers against derivative assets and $9 million of collateral deposited with brokers against derivatives liabilities as of December 31, 2024. As of December 31, 2023, Occidental netted $42 million of collateral received from brokers against derivative assets and no collateral deposited with brokers against derivative liabilities.

GAINS AND LOSSES ON DERIVATIVES
The following table presents gains and (losses) related to Occidental’s derivative instruments in the Consolidated Statements of Operations for the years ended December 31:

millions
Income Statement Classification202420232022
Marketing Derivatives
Net sales (a)
(374)(74)381 
Interest Rate Swaps
Gains on interest rate swaps, net (b)
— — 317 
(a)Included derivative and non-derivative marketing activity.
(b)Occidental retired all remaining outstanding interest rate swaps on or before December 31, 2022.

CREDIT RISK
The majority of Occidental’s counterparty credit risk is related to the physical delivery of energy commodities to its customers and any inability to meet their settlement commitments. Occidental manages credit risk by selecting counterparties that it believes to be financially strong, by entering into netting arrangements with counterparties and by requiring collateral or other credit risk mitigants, as appropriate. Occidental actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. Occidental also enters into futures contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk, if any.