Berkshire Ramps Up Wager on Occidental as Crude Prices Surge

(Bloomberg) — Berkshire Hathaway Inc., the conglomerate run by billionaire Warren Buffett, boosted its investment in energy giant Occidental Petroleum Corp. as oil prices hit their highest level in almost a decade.

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Berkshire this year purchased almost 30 million additional shares of Occidental, according to a Friday regulatory filing, bringing its total holdings to 113.7 million shares. Omaha, Nebraska-based Berkshire holds about 11.2% of Occidental common shares in an investment currently valued at about $6.4 billion.

Berkshire did not immediately respond to a request for comment about the purchase.

Berkshire’s additional investment in Occidental comes as the price of crude has surged to multi-year highs following Russia’s invasion of Ukraine and fears of a supply crunch. Oil topped $115 a barrel on news the U.S. is considering a ban on imports of Russian crude as additional punishment on Moscow. Prices could reach $150 a barrel in the next three months if Russian crude continues to be largely shunned, said Damien Courvalin, head of energy research at Goldman Sachs Group Inc.

Shares of Occidental soared this week, logging a 45% gain, the biggest gain since 2020. Occidental’s shares haven’t been this high since its May 2019 announcement of a definitive $55-billion deal, inclusive of debt, for Anadarko Petroleum Corp.

Buffett invested $10 billion to help fund Occidental’s takeover of Anadarko. Most of Berkshire’s stake in Occidental — more than 83 million shares — are tied to warrants acquired in that deal, which have been generating payments.

Billionaire activist investor, Carl Icahn, who battled the Anadrako deal and blasted Buffett’s expensive financing, cut his stake in Occidental to 3.4%, selling 26,941,467 shares between Feb. 28 through March 2, according to filings.

A representative for Icahn wasn’t immediately available for comment.