Why Berkshire Hathaway Sold Oil and Bought Delta Air Lines

Berkshire Hathaway’s purchase of Delta Air Lines is a selective bet that the airline’s structural advantages will outweigh a temporary jet-fuel shock.

• Berkshire disclosed a $2.6 billion Delta stake at the end of March, increased it by 44% in the second quarter to about 57 million shares, and held a position worth roughly $5.4 billion at the end of June.
• Over five years, the NYSE Arca Airline Index lost about 31% including dividends, while energy stocks returned more than 192% and the S&P 500 about 86%; the closure of the Strait of Hormuz then roughly doubled jet-fuel prices.
• New York Harbor diesel futures implied a price of about $5 a gallon for September 2026 versus $3.73 for June 2027, with two-thirds of the potential relief coming from a narrower refining premium rather than cheaper crude oil.
• U.S. airlines largely abandoned fuel hedging: Southwest ended its program in late 2025, while Lufthansa had hedged 86% of its 2026 fuel and Ryanair about 80% of the following year’s needs.
• Delta’s Philadelphia-area refinery could reduce fourth-quarter fuel costs by around $0.40 a gallon, and its operating income covers interest expense more than eight times, whereas American’s operating income currently does not cover interest.

Takeaway: Berkshire appears to favor Delta’s refinery, balance-sheet strength and pricing power over a broad airline exposure, but the thesis remains exposed to a prolonged Middle East conflict, higher Treasury yields and a possible diesel-export ban.