Barron’s, “ With oil prices down more than 15% over the past three months, it might seem strange that billionaire investor Warren Buffett’s Berkshire Hathaway is doubling down on Occidental Petroleum.

The shares aren’t having a great year–they’re down 4% since Jan. 1. That wouldn’t necessarily be a deterrent for Buffett, since he often says that drops in stock prices should be seen as an opportunity to buy. The Berkshire stake has now grown to almost 28% of the company.

Buffett also says he likes to bet on the U.S., and his Occidental wager can be seen as one. The company agreed to buy privately held CrownRock earlier this month for $12 billion for extensive shale acreage in the Permian Basin in West Texas and southeastern New Mexico.

The revival of the onshore U.S. oil industry has been a huge energy story. The world’s biggest economy is now also its biggest crude producer at around 13 million barrels a day.

The rise of shale oil helps stabilize the world market. If Islamist rebels attack ships in the Red Sea, or the Organization of the Petroleum Exporting Countries decides to restrict output, U.S. producers can step up.

To be sure, even though OPEC’s grip on the global market has weakened somewhat–Angola leaving the blocis the latest illustration–it’s still strong. Oil prices can fluctuate a lot within only small changes in supply and demand. With discipline, OPEC will have little trouble putting a floor under prices next year.

But OPEC is also contending against other factors, too. Energy demand may weaken with the global economy, and the economy itself doesn’t require nearly as much oil as it used to for growth.

Buffett’s bet on Occidental isn’t about just one company. It’s a bet on stable energy markets and U.S. security. It’s the kind of wager he likes to make.

—Brian Swint“