The summer heat is causing the climate-change issue to rage once again. Rising temperatures across the globe have encouraged many of the world’s nations to ramp up their efforts to lessen carbon dioxide emissions. Amid this, Warren Buffett’s stance on fossil fuels has garnered significant attention.
Many well-known companies have followed suit. Research has concluded that wind and solar power often prove more cost-efficient than traditional energy sources such as gas, coal, and oil regarding electricity generation. Certain governments have even begun introducing incentives for the use of electric vehicles.
In recognition of these facts, you should not be surprised that many believe that the need for fossil fuels is expected to decrease in the near future.
However, not all share this opinion.
Warren Buffett’s Feelings
One of the more prominent names questioning this assertion is Berkshire Hathaway CEO and Wall Street wizard Warren Buffett. Financial analysts have estimated that he has already bet $35 billion that such beliefs will ultimately prove misguided.
Despite many nations and companies shifting away from fossil fuels, Buffett’s belief in oil and gas companies remains strong. In fact, Chevron currently holds the position as Berkshire Hathaway’s fourth largest holding. The investment house possesses roughly $19.1 billion worth of assets in the company.
Buffett first purchased stock in the major energy corporation during the later stages of 2020 when the energy sector experienced struggles due to the impact of the Covid-19 pandemic.
Buffett did slightly decrease his company’s investment in Chevron by 2.5 percent earlier in the year. However, this decision followed his investment in nearly 16 million shares in the company that increased Berkshire’s assets by more than 14 percent.
Chevron Agrees with Buffett
Chevron agrees with one of its principal investors. Like Buffett, company executives have yet to buy into claims that fossil fuel demand will lessen any time soon. During the first fiscal quarter of 2024, the corporation heightened its worldwide production of oil and gas by 12 percent. Chevron’s economic analysts believe these production numbers will only go up over the next three years.
Inspired by these projections, Chevron has invested in numerous expansion projects. Two such efforts are set to take place in the Gulf of Mexico and begin this year and in 2025, respectively. Additionally, the company plans to increase production capacity in Israel’s Tamar gas field.
Additional Energy Companies Favored by Berkshire
The energy producer Occidental Petroleum ranks fifth in terms of corporate assets owned by Berkshire Hathaway. Currently, the firm holds $15.7 billion in Occidental’s shares and most market experts believe the energy company will only gain a greater position in Buffett’s portfolio.
Earlier this year, the famed CEO said Occidental is one of only eight stocks he expects his company to maintain indefinitely. He attributes his confidence in the stock to a strong corporate leadership team making decisions benefiting both the country as a whole, as well as its investors.
Has Buffett Made the Right Choice?
In maintaining significant positions in oil and gas, perhaps Buffett has made yet another wise decision likely to pay huge dividends in the coming years. However, only time will tell.
