The Oil Slump Prompts Berkshire Hathaway To Buy More Occidental Shares

While the banking crisis spreads, Warren Buffett has been investing heavily in Occidental Petroleum through Berkshire Hathaway.

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In multiple trades on Monday, Tuesday, and Wednesday, the Omaha, Nebraska-based conglomerate bought 7.9 million shares. Approximately $466.7 million was spent on the purchases at an average price of $59.17.

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A total of 208 million Berkshire shares were acquired in the deal, representing 23.1% of Occidental's market capitalization.

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A slowdown in global economic growth has brought down oil prices this week, causing the energy stock to drop about 5%. Wednesday, West Texas Intermediate futures reached their lowest level since December 2021, falling more than 5% toward $67.61 a barrel. On Thursday, WTI fell to $66.44 a barrel as a result of continued weakness.

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Occidental is already one of Berkshire's largest stakes and Berkshire has doubled its stake twice just this month alone. Amounts of 5.8 million shares had been purchased by the “Oracle of Omaha” on March 3, March 4 and March 7 for $352.5 million.

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It was reported earlier this month by Trade Algo that Occidental CEO Vicki Hollub met with Buffett at the end of last month to discuss oil and gas in general as well as the technology that is involved in this field.

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The investment giant Berkshire Hathaway received regulatory approval for the purchase of up to a 50% stake in Occidental Oil in August, sparking speculation that it may eventually buy the entire company.

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As well as owning $10 billion worth of preferred stock in Occidental, Berkshire also holds warrants to purchase another 83.9 million common shares in the company for $5 billion, or $59.62 per share, if the warrants are exercised. This set of warrants was acquired through Occidental's deal with Anadarko that helped to provide funding for the acquisition of the company in 2019.

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There was a nearly 1% increase in the share price of Occidental Petroleum on Thursday morning.