[The reason why Warren Buffett chose an oil company instead of Apple]

1/ Could he have foreseen the perfect storm in the oil market? Buffet sold half of his stake in Apple this year, increasing his cash reserves to a record high, but increasing his stake in Occidental, an oil producer in the U.S., rather.

2/ U.S. shale oil producer Occidental Petroleum OXY is the only stock Buffett has not sold since Q2 2020

3/ Why did Buffett sell Chevron and buy Occidental? We need to pay attention to the difference between the two companies.

4/ If both companies are U.S. oil companies but Chevron is a comprehensive energy company that produces 3.35 million barrels per day (as of the first quarter of 2024), Occidental is a company specializing in U.S. shale oil production.

5 / Meaning Buffett highly valued ‘oil produced in the United States’

6/ When will Buffett’s “strategy” focus on U.S. oil companies succeed.

7/ Only the future value of companies that make American oil can grow if they go through three paths. It is called the perfect storm of the oil market.

8/ The first storm is ‘Middle East escalation.’ If Iran attacks Israel, the war could spread throughout the Middle East.

9/ Iran believes Israel was responsible for the July 31 assassination of Haniyeh, the top political leader of Palestinian militant Hamas, in the capital Tehran.

10/ Lebanese militant Hezbollah says it will retaliate against Israel, saying its top commander was killed in an Israeli airstrike

11/ According to a paper called “U.S.-Iran war simulation and international oil price movements” published by economists at the Asian Development Bank (ADB) in 2020, the Middle East escalation could send oil prices soaring by up to 11 times.

12/ The second storm is ‘Trump Elected’.

13/ Republican presidential candidate Donald Trump told Fox News on the 4th (local time) that he would ease regulations, increase oil production, and supply it to the world. In fact, the U.S. declared a war that it would take the lead in the oil market

14/ The third storm is a return to Russia. The Guardian reported on the 4th (local time) that if Donald Trump is elected president of the U.S. in November, Putin will win by cutting military aid to Ukraine. “In the aftermath, international food and energy prices could rise again.”