Warren Buffett’s Pilot Co Shifts Focus to Core Business
In a strategic move, Warren Buffett’s Pilot Co is shutting down its international oil trading operations to concentrate on its core business of operating service stations and truck stops in the United States. This decision marks a significant shift in focus for the company, which had ventured into the global oil trading market after Berkshire Hathaway acquired a 39% stake in 2017.
A Refocus on North American Operations
Pilot Co, a unit of Berkshire Hathaway, has let go of almost all employees involved in international trading, according to sources familiar with the matter. The company will now redirect its resources to growing its North American businesses, including its Pilot Flying J service stations and truck stops.
A Brief Foray into International Trading
Knoxville, Tennessee-based Pilot Co had hired experienced energy traders in recent years to build up its trading operations. However, the company has now decided to scale back its international ambitions and focus on its core strengths. Among those who have left the company are distillate fuel traders Anthony Hicks and Nghiem Nguyen.
Winding Down International Obligations
A small team of traders, including fuel trader Ajai Hari, will remain with the company to close out contractual obligations with customers, including Ecuador’s national oil company PetroEcuador. Pilot Co’s President, Gary Hoogeveen, emphasized that the company’s primary focus is on delivering reliable fuel supply to its travel centers and customers across North America.
A Cautionary Approach to International Markets
While Pilot Co may still tap into international markets to meet its supply needs, the company’s appetite for the risks associated with international oil trading has diminished. This cautionary approach is likely driven by the decline in pre-tax profit from over $2.3 billion in 2022 to $1.06 billion in 2023.
A Long History of Service
Founded by Jim Haslam in 1958, Pilot Co operates over 650 travel centers and 75 fuel-only locations. The company also has a U.S.-focused wholesale fuel marketing and distribution business and an oilfield water disposal business. Despite a decline in revenue and pre-tax earnings in the first nine months of 2024, Pilot Co remains a significant player in the North American energy market.
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