Goldman Sachs Just Delivered Fantastic News For 2 Major Warren Buffett Stocks (and the Rest of Berkshire Too!)

Goldman Sachs in a recent report pushed its estimate for “peak oil” out five years to 2040, forecasting global oil demand rising from about 103.5 million barrels per day last year to roughly 113 million bpd by 2040—driven by jet fuel demand, power-hungry AI data centers and slower EV uptake—an outlook echoed in part by the IEA and oil majors that extends the fossil-fuel demand runway. The shift supports energy-sector fundamentals even as Goldman projects WTI will average about $53/barrel next year on a surge of new supply, implying demand growth need not translate immediately into higher prices. For institutional investors seeking balanced exposure, the note argues Berkshire Hathaway is a practical vehicle: roughly $11bn in Occidental and $19bn in Chevron (about 10% of its public-stock portfolio), plus pipelines and energy subsidiaries that each add over $1bn to operating income (around 5% of GAAP income), offer participation in a longer oil cycle with less direct commodity volatility than owning pure E&P names.

Analysis

Goldman Sachs has moved its "peak oil" estimate from 2035 to 2040, projecting global oil consumption to rise from last year’s average of 103.5 million barrels per day to about 113 million bpd by 2040, driven by stronger jet-fuel demand, power-hungry AI data centers and slower EV adoption. The IEA, ExxonMobil and OPEC pronouncements cited in the article provide corroborating long-run demand support, with ExxonMobil noting oil and gas could remain the single largest energy source 25 years hence.

Goldman also forecasts WTI averaging roughly $53 per barrel next year versus just over $60 currently, citing a near-term swell of new supply; this underscores a disconnect between rising long-term consumption and near-term price pressure, keeping exploration-and-production margins and cash flows volatile. Energy ETFs such as XLE and VDE are presented as direct plays on the sector, while commodity price weakness can still undermine pure E&P returns.

Berkshire Hathaway is positioned as a lower-volatility conduit to the extended oil cycle: the firm holds ~265 million OXY shares (~$11bn) and ~122 million CVX shares (~$19bn), together about 10% of its public-stock portfolio, plus pipelines and energy subsidiaries whose gas pipelines and non-utility energy businesses each contribute more than $1bn to annual operating income (around 5% of GAAP income). These asset types are less commodity-sensitive than standalone E&P exposure, though Berkshire’s reporting offers limited granularity on unit-level performance, which is a monitoring consideration.

Key Decisions for Investors

• Consider incremental exposure to Berkshire Hathaway for diversified, lower-volatility participation in a lengthened oil demand cycle given its sizable OXY/CVX stakes and pipeline/energy business cash contribution
• If seeking purer sector beta, allocate to energy ETFs like XLE or VDE rather than individual E&P names to avoid single-name and commodity-price volatility
• Avoid or hedge concentrated E&P positions until signs of sustained oil-price recovery emerge, because Goldman expects near-term WTI weakness to ~$53/barrel despite longer-term demand growth
• Monitor Berkshire’s filings for greater disclosure on pipeline and non-utility energy performance and watch supply indicators and WTI direction as key triggers to adjust sector exposure