Warren Buffett’s Berkshire Hathaway has closed a $9.7 billion deal to acquire Occidental’s petrochemicals arm, OxyChem. The deal was signed, while the price for crude oil has tanked into the $60s, and drilling crews have thinned out, causing companies to tighten their budgets. The shale boom that once reshaped global energy now looks tired. But Buffett is treating the slump as an opening with a play built on steady chemical margins rather than volatile crude..

At the same time, geopolitics refuses to step aside. Ukraine has pushed its drone war deeper into Russia’s refining heartland, knocking out significant capacity, forcing gasoline rationing in Crimea, and prompting Moscow to extend bans on gasoline and diesel exports. These disruptions remind traders that the refined products markets can tighten overnight.

Why This Is a Slick Story

At the macro level, oil looks oversupplied, driven by rising supply from major producers. But the real-time shocks from Ukraine’s drone strikes prove that geopolitics can still push gasoline and diesel prices higher, even if oil prices don’t move much.

U.S. shale is showing visible strain. Exxon is cutting around 2,000 jobs, independents are trimming budgets, and the number of oil rigs continues to decline. This is what a cooling cycle looks like. First, employment shrinks, then production eases.

Buffett’s deal makes sense in that light. Petrochemicals generally offer steadier margins than chasing barrels in a $60-per-barrel world. OxyChem turns hydrocarbons into plastics, coatings, and industrial chemicals. That’s the kind of business Buffett favors, with essential inputs that generate positive cash flow in good times and bad.

And the question of Russia’s oil industry looms large. Ukraine’s drones have sidelined millions of tons of refining capacity and disrupted local fuel supply. But crude exports still leave Russian ports primarily for China and India, thanks to a network of older tankers and alternate routes. The International Energy Agency continues to list Russia as a top supplier, proof that Ukraine can raise costs and reduce margins but cannot collapse Russian crude exports outright.

The Smart Play on Crude

Crude is stuck in the $60s, and shale producers are retrenching, but Warren Buffett is doubling down by acquiring OxyChem. Investors can utilize this as a selective, cyclical setup that favors refiners, petrochemicals, and large integrated companies. We have picked four winners, and you can click the tickers below to learn why we chose them:

VanEck Oil Refiners ETF (CRAK)

Alerian MLP ETF (AMLP)

Valero Energy Corp (VLO)

Bottom Line

Oil is not dead; it's just complicated. Prices are under pressure, shale jobs are disappearing, but Buffett is betting billions on petrochemicals. The smart play is in selective positioning: focus on the refiners and chemicals, stay with the large integrated players, keep shale exposure light, and use ETFs for clean implementation.

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November 28, 2025