Pilot Co, a subsidiary of Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway, is shutting down its international oil trading operations to concentrate on its U.S. gas stations and truck stop businesses. This strategic shift comes as the global oil industry faces challenges from sluggish economic growth and the rapid development of alternative energy sources. In 2024, global oil and gas exploration and development investment is projected to decrease by 2.5% to $553.8 billion, marking the first decline in four years, while global crude oil export volumes have fallen by 2%.
The U.S., as the largest oil and gas consumption market, is becoming increasingly attractive to domestic oil companies. This trend has been bolstered by policies favoring traditional fossil fuels. Pilot Co, North America's largest travel center operator, provides fuel, retail goods, fast food, and various services, primarily at locations near interstate highways.
Berkshire Hathaway initially acquired a 39% stake in Pilot in 2017, increasing it to 80% in 2023, and fully acquiring the company by purchasing the remaining 20% last year. Despite these investments, Pilot's pre-tax profits dropped from over $2.3 billion in 2022 to $1.06 billion in 2023, prompting the company to cut its energy trading division and lay off nearly all employees involved in international trading.
U.S. oil companies like ExxonMobil and Chevron have also increased their domestic production significantly over the past decade, contributing to a trend of American oil firms returning to domestic operations. In 2023, ExxonMobil announced a $60 billion acquisition of shale producer Pioneer Natural Resources, marking its largest acquisition since its merger with Mobil in 1999.
