Buffett's Chevron Bet Pays Off as Oil Hits $100

Berkshire Hathaway disclosed in a recent SEC filing that it purchased over 8 million shares of Chevron (CVX) in the fourth quarter of 2025. This move increased Berkshire's total stake in the oil giant to roughly 130 million shares, making it one of the conglomerate's top five holdings.

This purchase is part of a deliberate strategy. Berkshire has been actively building its exposure to the energy sector, a move underscored by its simultaneous reduction of its massive Apple stake. The conviction extends beyond Chevron, as Berkshire also holds a large position in Occidental Petroleum (OXY) and recently completed the acquisition of OxyChem from Occidental in early 2026.

The timing of these investments is now under the spotlight. When Berkshire was buying, Brent crude oil was averaging around $64 per barrel. Fast forward to today, and oil prices are hovering near $100, making the initial investment look exceptionally prescient.

Chevron itself delivered a strong operational performance in 2025, posting record production and generating a massive $33.9 billion in operating cash flow. It also returned $27.1 billion to shareholders through dividends and buybacks, marking its 39th consecutive annual dividend increase.

For investors, Buffett's move matters because it signals a high-conviction bet on the enduring value and cash-generating power of well-run energy giants, especially in a higher-price environment. It's a lesson in finding value before the broader market catches on.

The core investment thesis for Chevron rests on three pillars: massive operational scale, consistent shareholder returns, and significant leverage to oil prices. The company excelled on all fronts even when oil was cheap. Now, with prices near $100, the financial upside is dramatically amplified.

Chevron's operational leverage is key. The record cash flow it generated at $64 oil provides a incredibly strong base. At $100 oil, every additional dollar in price flows almost directly to the bottom line, supercharging free cash flow, dividend coverage, and buyback capacity.

This isn't just a story about high oil prices. Chevron has also embarked on a major cost-cutting program, targeting $3 to $4 billion in structural savings by the end of 2026. This provides a buffer if oil prices retreat, supporting the dividend that has grown for 39 straight years. The investment offers a compelling mix of growth potential and defensive income.