Looks Like Warren Buffett Just Bet Big on an Oil Price Spike

With the war between Russia and Ukraine escalating in an ugly way last week, some are speculating the West may begin to ban Russian oil imports outright -- a step it hasn't taken yet. If that happens, Russia's 5 million barrels per day of exports could go off the world markets, which would spike oil prices even further than they've already gone. In that scenario, some analysts speculate the price of oil could rise to $150 per barrel or even higher, compared with $115 today.

It appears Warren Buffett's conglomerate Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is preparing for this scenario, as the company rapidly bought up $5 billion in the stock of Occidental Petroleum (NYSE: OXY) between Wednesday and Friday of last week, even as the price of the stock was spiking to its highest levels in two and a half years.

While we don't know if the purchase was made by Buffett himself or one of his lieutenants, Todd Combs and Ted Weschler, this was a significant purchase, which leads me to think it was Buffett himself. The Occidental purchase totaled 61 million shares worth $5.1 billion, nearly the size of Berkshire's Chevron (NYSE: CVX) stake, its largest oil common stock holding as of Dec. 31. Berkshire held $4.5 billion in Chevron stock at the end of last year, which would be worth about $6 billion today after its strong 33% price appreciation year to date.

Source Fool.com