Warren Buffett and Charlie Munger discuss the future of oil production, why the sun is the long-term answer for energy, and the principles they use to decide which businesses to invest in.
In this video you'll learn:
Why global oil production may eventually peak and then decline gradually
Why Munger thinks using up hydrocarbon reserves so fast is a mistake
How to think about an investment like buying a farm, not a stock ticker
What Benjamin Graham's "margin of safety" means in practice
Why Buffett and Munger prefer businesses that generate a lot of cash
⏱️ CHAPTERS
00:00 The future of oil pr...
What Warren Buffett said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Warren Buffett predicted that world oil production will decline over the next 25 years, despite current record output of 86-87 million barrels per day. He argued that demand, especially from China's 10 million car sales this year, will remain strong, and that the world lacks surplus capacity to quickly increase production. He emphasized that oil will not run out but will gradually taper off, and that society cannot wean itself off oil quickly. Buffett then shifted to investing principles, explaining that he buys stocks based on understanding the business and its financial statements, often without meeting management. He highlighted the importance of a margin of safety, as taught by Graham, and preferred businesses that generate cash, like apartment properties, over those that tie up capital in inventory. He noted that many businesses he would not buy regardless of management quality.
Key takeaways
World oil production will be lower in 25 years than today.
Current world oil production is 86-87 million barrels per day, a record high.
China will sell over 10 million cars this year, sustaining oil demand.
If oil production is down 25 years from now, it'll be a different world. China's going to sell over 10 million cars this year. The demand is going to keep, even at these prices. It's hard for me to imagine demand falling off a lot. So if production falls off, you'll have some interesting consequences. Oil won't run out. It doesn't work that way. What oil will do at some point — who knows when, people have predicted a lot of everything — oil at some point, daily productive capacity throughout the world will first level off and then start declining very gradually. The nature of oil extraction is such that wells don't — with rare exceptions — they don't go to a given point producing 100 barrels a day and then all of a sudden quit or anything like that. So you run into this depletion aspect and get into decline curves and that sort of thing.
We're producing in the world 86 or 87 million barrels a day of oil, which is more than we've ever produced before. By at least my calculations, we are very much closer to producing almost as much as our productive ability is in the world with fields in their current stage of development than we've ever been. I mean, our surplus capacity, I think, is less than — well, any time I can remember — and it's quite a bit less than most periods. So we don't have the ability to crank up in any short period of time the 86 or 7 to 100 million barrels a day. But whatever that peak will be, and whether we've hit it five years from now or 50 years from now, then it will just gradually taper down and the world will adjust to it, and hopefully we'll be thinking about it, you know, well before it happens, and various adjustments will be made in the world that will cause the demand to somewhat taper down as the available supply. But we will be producing oil far beyond this century. It's just the question is whether we're producing 50 million barrels a day or 75 million or 25 million barrels a day. I don't know the answer to that.
There's a lot of oil in place in the world. We've messed up the recovery of a lot of the oil. I mean, we never recovered the total potential of fields, and some fields we've misengineered in ways so that we'll recover a very small percentage. Now, maybe there'll be better engineering, tertiary recovery, and that sort of thing in the future. It's nothing like an on-and-off switch, though, in terms of the world producing oil or adjusting to reduced capacity or anything like that. You may still have enormous political considerations to access to the available oil because it's going to be so darn important to our society for so long. There's nothing we can do in any short period of time that will wean the world off of oil. And that is a fact of life, Charlie.
Well, if we get another 200 years of economic growth pretty well dispersed 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. So eventually, of course, you have to use the sun. There is no other alternative, and I think we can confidently predict that there'll be some pain in this process of adjusting to a different world. 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 feedstocks. 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. And if you look at it backwards, what should we have done? Hell, we should have bought all the oil in the 30s in the Middle East and taken it over here by tankers and put it in our own ground. I mean, it's obvious to see what should have been done in the past.
Even though that's obvious, are we doing the equivalent of that now? And the answer is basically no. So I think the governmental policy tends to be way behind in terms of rationality. And I think we'll just have to soldier through. But eventually, if we're going to have a prosperous civilization, we have no other alternative than the sun. What's your over-under figure for 25 years from now in world production? Oil per day?
3 more exchanges in this transcript
Sign in free to read the rest of this interview. No card required.
Buffett, W. (2026, October 8). Buffett & Munger on the Future of Oil and Investing [Interview transcript]. Legendary Investors. CEOInterviews.AI. https://ceointerviews.ai/interview/3009652/
MLA
Warren Buffett. "Buffett & Munger on the Future of Oil and Investing." Legendary Investors, 8 Oct. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/3009652/.
BibTeX
@misc{buffett2026_3009652,
author = {Warren Buffett},
title = {Buffett \& Munger on the Future of Oil and Investing},
howpublished = {Interview transcript, Legendary Investors. CEOInterviews.AI},
year = {2026},
month = {oct},
url = {https://ceointerviews.ai/interview/3009652/},
note = {Speaker-attributed transcript with timestamps}
}
