Two of Warren Buffett's biggest stock holdings -- oil giants Chevron (NYSE: CVX) and Occidental Petroleum (NYSE: OXY) -- got some unexpectedly good news this week. Saudi Arabia revealed it would cut its output by 500,000 barrels per day (BPD) beginning next month, with Russia and others following with their own reductions. That news shocked the oil sector and sent oil prices soaring above $80 a barrel. It could drive crude prices even higher in the coming months as demand rebounds. 

Here's a look at the news and how Buffett stands to benefit.

Saudi Arabia is leading a surprise cut in global oil supplies. The country said it will make a voluntary 500,000 BPD reduction in its output starting next month that will last until the end of this year. In addition, several other OPEC members will cut their output. Meanwhile, Russia agreed to extend its 500,000 BPD cut from last month through the end of the year. That amounts to a more than 1 million BPD reduction in global oil supplies. 

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Source Fool.com