Warren Buffett remains chairman of Berkshire Hathaway's board, having concluded his role as CEO at the end of last year. Under Buffett's leadership, Berkshire Hathaway made significant investments in the oil and gas sector, totaling at least $58 billion.
This strategy reflects a long-term investment philosophy within the company.
These investments occurred during a period when Berkshire Hathaway had generally not been a major buyer of stocks and had built substantial cash reserves.
Key Energy Investments
Berkshire Hathaway's specific acquisitions and stake developments in the energy sector include:
- Building significant positions in Chevron and Occidental Petroleum.
- Acquisition of Dominion Energy's natural gas and storage assets in 2020, valued at nearly $10 billion including debt assumption.
- Purchase of a 50% stake in the Cove Point liquefied natural gas facility from Dominion Energy for $3.3 billion in July 2023.
- Acquisition of the remaining 8% of Berkshire Hathaway Energy for approximately $2.4 billion in October 2024.
- Acquisition of Occidental Petroleum's petrochemical division, OxyChem, for about $9.7 billion in cash in 2025. This unit produces chemicals for water treatment, healthcare, and other commercial applications.
Market Outlook and Strategic Rationale
Berkshire Hathaway's substantial commitment to oil and energy assets indicates a belief in their enduring importance.
Despite previous periods of underperformance, crude futures have shown increases, influenced by geopolitical factors and supply shortages.
The global demand for energy, potentially intensified by sectors like artificial intelligence, suggests a continued need for diverse energy sources, including fossil fuels.
A 2023 report from the U.S. Energy Information Administration's (EIA) International Energy Outlook projected that crude oil, liquid hydrocarbons, and biofuels would meet global liquid fuel demand through 2050. The report also noted uncertainties in future demand and supply, alongside the potential for global reserves to increase through new technologies. While oil is a finite resource, it may serve as a portfolio diversifier, particularly amidst concerns about the U.S. dollar's value.