Although energy prices have declined, an investor believes oil stocks are still a buy.

Bill Smead, chief investment officer at Smead Capital Management, believes that despite the recent decline in oil prices, there is still a justification for investing in oil stocks. This is due to the likelihood that energy costs would remain high or potentially rise further, he told CNBC's "Street Signs Asia" on Thursday.

He referred to the decline in crude oil prices as "the first important correction" in a bull market that began in the spring of 2020 following a price crash.

"You have this enormous move, you go from $20 per barrel to $120 per barrel, and then you draw back — and now people are saying, 'Oh yeah, that's it, that'll fix inflation right there,'" Smead explained.

However, multiple reasons indicate that prices would rise, he said.

He noted that the United States must replenish 180 million barrels of strategic reserves that were depleted to fulfill demand, and that supply remains tight.

"What happens when China's economy is fully open... when their quarantines are lifted?" he questioned, implying that demand will increase once more.

This year, covid outbreaks in China have prompted lockdowns and decreased energy use in the world's most populated nation.

When further movement limitations are loosened, it is expected that demand will rebound.

"The oil supplies here appeal to us. "You can purchase them here, and Warren Buffett has already done so," Smead remarked.

This year, both Brent crude futures and U.S. West Texas Intermediate futures climbed beyond $120 a barrel, but are presently trading at $96.88 and $90.88, respectively. Nonetheless, both benchmarks are over 40% higher than they were a year ago.