Warren Buffett's Historic $58 Billion Energy Wager: A Six-Decade Investor's Bold Long-Term Play

With over sixty years at the helm of Berkshire Hathaway, Warren Buffett has built a reputation for making contrarian bets that challenge market sentiment. Before stepping back from his executive role, the legendary investor and his team took a calculated gamble that is now beginning to prove its merit. Despite widespread skepticism about fossil fuels and a multi-year downturn in the energy sector, Berkshire funneled approximately $58 billion into oil and gas assets—a stunning commitment that underscores Buffett’s confidence in the industry’s long-term viability.

This strategic pivot marks a significant departure from Berkshire’s cautious stance in recent years, during which the conglomerate amassed enormous cash reserves while largely staying on the sidelines. The concentrated push into energy demonstrates that Buffett and his team view oil and gas not as a sunset industry, but as a critical component of the global economy for decades to come.

How Berkshire Positioned Itself in the Energy Sector

Berkshire’s commitment to energy took multiple forms, showcasing a deliberate and comprehensive approach to sector exposure. The conglomerate’s major moves included:

The company built substantial equity positions in leading energy corporations. Its stake in Chevron (NYSE: CVX) reached nearly $21 billion in value, becoming the fifth-largest holding in Berkshire’s stock portfolio at roughly 6% ownership. Similarly, Berkshire accumulated a $12 billion position in Occidental Petroleum (NYSE: OXY), representing its sixth-largest equity investment and approximately 27% of that company’s shares—a more controlling interest.

Beyond pure equity plays, Berkshire aggressively expanded its regulated energy utility operations. In 2020, the company acquired the natural gas and storage assets from Dominion Energy in a transaction valued at nearly $10 billion when accounting for assumed debt. This was followed in July 2023 by a $3.3 billion investment to acquire a 50% stake in the Cove Point liquefied natural gas facility, also from Dominion Energy. The company then moved to fully consolidate its energy holdings by paying approximately $2.4 billion in October 2024 to acquire the remaining 8% stake in Berkshire Hathaway Energy that it didn’t already control.

In 2025, Berkshire further diversified its energy exposure by acquiring Occidental Petroleum’s petrochemical division, OxyChem, for about $9.7 billion in cash. This unit produces water treatment chemicals, healthcare products, and other commercial applications—adding value beyond traditional hydrocarbon extraction.

Together, these investments represent a calculated thesis that energy infrastructure and commodities will remain economically vital well into the middle of this century.

The Geopolitical and Technological Case for Long-Term Energy Demand

The investment thesis becomes clearer when examining recent market dynamics and structural demand drivers. After enduring a difficult period, crude oil futures have climbed more than 14% during the current year, propelled by multiple converging forces.

Geopolitical tensions have emerged as a significant short-term catalyst. The political upheaval in Venezuela and ongoing tensions with Iran have created supply anxieties that support prices. Additionally, a severe winter weather system affecting the United States generated unexpected production disruptions, further tightening markets and boosting crude valuations.

However, the deeper bullish case extends beyond near-term volatility. The rise of artificial intelligence represents a structural demand tailwind that few analysts initially appreciated when Berkshire began building its energy positions. AI systems are extraordinarily data-intensive, requiring massive computational infrastructure that demands enormous electricity consumption. Powering this new technological era will require all available energy sources—whether from traditional fossil fuels, expanding renewables, emerging nuclear capacity, or hydroelectric facilities.

According to a 2023 U.S. Energy Information Administration report examining global energy trends through 2050, sufficient reserves of crude oil, liquid hydrocarbons, and biofuels exist to meet worldwide liquid fuel needs across that timeframe. Critically, the EIA also flagged substantial uncertainty in future supply and demand trajectories. As technology evolves and new extraction and refining methods emerge, global reserves could continue expanding, even as consumption patterns shift.

While energy transition and renewable expansion will accelerate, these shifts typically unfold over decades rather than years. The transition away from oil-dependent systems requires massive infrastructure retooling, regulatory evolution, and behavioral change. Meanwhile, the immediate and medium-term energy demands of growing AI applications, data centers, and developing economies ensure continued reliance on diverse energy sources.

The Portfolio Diversification Argument

From a portfolio construction perspective, Buffett’s energy bet also makes sense amid broader economic uncertainty. As investors grow concerned about currency stability—particularly weakness in the U.S. dollar—owning tangible energy assets provides a hedge against monetary degradation. Oil and gas reserves represent physical assets with genuine economic utility, insulating a portfolio from purely financial asset risks.

This positioning reflects the investment philosophy that has guided Warren Buffett through six decades of market cycles: buying genuine value when others retreat, maintaining conviction over long timeframes, and recognizing that fundamental economic needs persist regardless of temporary sentiment shifts. The $58 billion energy commitment stands as a testament to that approach, made even as much of the financial world remained skeptical about fossil fuels’ future role in the global economy.