Investing.com -- Piper Sandler upgraded Occidental Petroleum and Murphy Oil to Overweight from Neutral after raising its mid-cycle oil price forecast, citing tighter expected crude balances and potential supply disruptions linked to the war involving Iran.

Piper Sandler increased its mid-cycle forecast for West Texas Intermediate crude to $75 a barrel from $70 and said the change reflects a swing of more than 2 million barrels per day in its 2026 global oil balance estimates.

Uncertainty remains over the duration of the Iran conflict which could have a lasting supply effect and a tighter spare capacity cushion beginning in the second half of 2026.

Higher prices will likely be needed further along the futures curve to encourage investment in production.

Piper lifted its price target on Occidental to $66 from $54. The brokerage said the company remains one of the strongest operators in the Delaware Basin and continues to deliver solid operating performance despite some decline in results during 2025.

The firm added that Occidental’s 2026 guidance showed stronger capital efficiency than earlier indications, with about $800 million less spending expected to support a similar level of production. Piper said the company maintains the efficiency gains are sustainable and does not expect concerns about durability to weigh on the stock in the near term.

Piper also upgraded Murphy Oil to Overweight and raised its price target to $41 from $33. The brokerage said the stock has lagged after weaker-than-expected exploration results in Côte d’Ivoire and softer 2026 guidance, which contributed to a sharp decline in relative performance against the sector.

Piper said Murphy offers significant operating leverage and could see a catalyst from further appraisal work at the Hai Su Vang project in Vietnam during the first half of 2026. The firm added that investors may increasingly assign value to the company’s longer-term resource potential in the country.