Warren Buffett: 'OIL PRICES WILL KEEP RISING' 💰🛢 Charlie Munger: This is why we buy oil stocks 🖤🔥

Warren Buffett and Charlie Munger discuss why they invest so heavily in oil.

This video represents everything they have ever said about oil in all Berkshire Hathaway meetings.

Warren Buffett and Charlie Munger believe that oil will continue to rise in price over the next many decades and centuries, partly because we are getting less and less of it, and partly because the dollar will depreciate in value.

Here is a transcript of everything they say in the video.

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Eventually the price of oil has to go way up.

We think we understand something like the oil business

If we were in an oil stock, it’s because we think it offers a lot of value at this price, but it does not mean that we think the price of oil is going up.

There’s nothing we can do, in any short period of time, that will wean the world off of oil.

If we get another 200 years of economic growth pretty well disbursed over the world, while the population of the world also goes up, all of the oil, coal, natural gas, and uranium reserves of the world are like nothing.

Personally, I think it’s extremely stupid to use up the hydrocarbon reserves of the world as fast as we are.
I don’t think we’ve got any good substitutes for those things as chemical feed stocks, and I think it’s perfectly crazy to use up something so precious for which you have no alternative that’s sure to be available.

Even at these prices — it’s hard for me to imagine demand falling off a lot.

We need the oil and the gas, and the coal, eventually, for chemical feed stocks more than we need it for keeping warm and propelling our vehicles.

We look at those businesses over a long time frame, but we are looking at what we expect their earning power to be three, five, 10, 15 years down the road compared to what we are paying.

I think one of the main reasons for being restrained in the use of hydrocarbons is that modern agriculture won’t work without them.

Obviously, you’re dealing with a finite resource.

The one thing I can promise you is — almost promise you — is that oil will sell for a lot more someday.

The one thing I’m quite convinced of, as we talked about this morning, is the fact the dollar will become less valuable over time, so that the dollar price of most things will go up

My view is that the single-most precious resource in the United States are its hydrocarbon reserves

So I’m all for — (applause) — using up the other fellow’s oil and conserving our own.

We don’t want energy independence. We want to conserve this stuff.
And thank God other people have some of this precious stuff they’re willing to sell.
I have the exact opposite idea on this subject than most people and, of course, I think I’m right. (Laughter)

I think the oil sands are an important asset for mankind, obviously. There’s a huge amount of oil there. They’re an important asset for mankind, you know, in — over the centuries to come.

We probably haven’t bought the last one.
In the end, we look at the cash, we look at available opportunities, both in investments and businesses, and we make decisions, occasionally, on buying something and sometimes we change our mind.
And that will continue that way. It’s been going on that way for a lot of years.

It’s an important industry

Oil is a big part of the economy,

Well — you go out over the extremely long term, I think that all hydrocarbons will be used, including all the coal.
So I think that, in the end, these hydrocarbons are a huge resource for humanity, and I don’t think we’ve got any good substitute.

I don’t like using them up very fast. So, I’m often on a road on my own on this one.
And people think that all this hydrocarbons are going to be stranded and the whole world’s going to change. I think we’re going to use every drop of the hydrocarbon sooner or later. We’ll use them as chemical feed stocks.

When you buy into an oil — a huge oil production company — you know, how it works out is going to depend on the price of oil to a great extent.
It’s not going to be your geological home runs or super mistakes or anything like that. It is a — it is an investment that depends on the price of oil.

I think Chevron’s benefited society in all kinds of ways and I think it continues to do so, and I think we’re going to need a lot of hydrocarbons for a long time and we’ll be very glad we’ve got them,

We should be very happy — that we can produce 11 million barrels a day, or something of the sort, in the United States, rather than being able to produce none and having to find 11 million barrels a day somewhere else (laughs) in the world to take care of keeping the American industrial machine working.

I like having big reserves of oil. I would just leave most of the oil we have here, and I’d pay whatever the Arabs charge for their oil and I’d pay it cheerfully and conserve my own. I think it’s going to be very precious stuff over the next 200 years.

[ibrahimseth]

Oil Trade:
Capital Buy=USD Sell=USD Gross
1000B 100 30 300B
2000B 80 30 750B
3000B 60 30 1500B
4000B 40 30 3000B
5000B 20 30 7500B
6000B 10 30 TP=18000B
If Total(Gross>Capital)=Surplus.
Buy Open Profit>100%>Loss.
Thank you.

[mattm]

Renewable energy technologies (or what we CALL renewable energy) is nowhere near market-ready and economically feasible, and it's doubtful whether it ever will be as long as there is a single drop of crude oil in the ground. Whenever I read a company's profile and it boasts about the company's renewable energy commitment and credentials, I instantly become wary and less likely to invest in that company. Eventually the adults are going to be back in the White House and oil (and natural gas) will be recognized as the REAL future of American energy independence.

[Bugnetblue]

Echo that 'Excellent summary' comment below.

These two guys are so insightful.
Charlie will be 100 in January.
Still sharp as a razor and funny too.

[bluegtturbo]

Who'd have thought it... Munger and Buffett Just Stop Oil fans 😊

[eddylauterback]

Warren aged a lot since the last meeting