Amid rising gasoline prices fueled by geopolitical tensions, shares of U.S. oil companies have surged recently. Carlos Slim, Latin America's richest individual, and his family are capitalizing on these gains. According to compiled market data, the Slim family's investment vehicle, Control Empresarial de Capitales, has sold approximately $497 million worth of PBF Energy Inc. (PBF.US) stock this year. During the period of U.S.-Iran conflict, the refiner's stock price nearly doubled, prompting the family to reduce their stake by more than one-third. The family also liquidated nearly $40 million of their holdings in Houston-based Talos Energy Inc. (TALO.US). U.S. regulatory filings show that Talos Energy's stock hit a three-year high in March, which was also the month of the family's highest trading volume for PBF Energy this year.
"These companies have performed well, but our position size had become too large. It was time to realize profits at favorable prices," stated Arturo Elías Ayub, Slim's son-in-law and spokesperson, during a telephone interview. "This does not signify a change in strategy." According to the Bloomberg Billionaires Index, Slim, with a fortune of $132 billion, is the wealthiest person in Latin America, primarily due to his holdings in telecom giant América Móvil SAB de CV. The 86-year-old Mexican magnate has increasingly shifted his wealth towards oil and gas companies in recent years, establishing himself as one of the largest private investors in his country's energy sector. Slim has been investing in energy for over a decade. Even after these sales, he remains a major shareholder in both PBF Energy and Talos Energy, with a combined stake value exceeding $1.3 billion, per the Bloomberg wealth index. His wealth has increased by nearly $21 billion this year, partly because his telecom conglomerate continues to grow despite intensified competition from Latin America's largest mobile operators. His other investments include the bank and insurer Grupo Financiero Inbursa and Spanish construction company FCC.
The decision to "take money off the table" by selling Talos Energy and PBF Energy shares comes as both companies' stocks have risen more than 30% this year, influenced by Middle Eastern conflicts disrupting global supply chains. The family's move coincides with U.S.-Iran ceasefire talks and a retreat from peak oil prices. The family made multiple purchases of both companies' stock last year, illustrating their successful timing of commodity cycles. Talos Energy is a Houston-based independent upstream oil and gas exploration and production company founded in 2011, operating in the U.S. Gulf of Mexico and offshore Mexico. Its business model is classic "E&P" (Exploration and Production), involving drilling for oil and gas and selling it to buyers, with profits directly affected by oil price fluctuations. Talos Energy's operations are highly correlated with oil prices. The Iran conflict, which pushed oil prices higher, directly benefited the company, with its stock previously reaching a 52-week high of $15.70 during the geopolitical tensions. However, as ceasefire talks progressed and Brent crude retreated to around $95, market expectations for further oil price increases cooled, putting pressure on Talos Energy's share price.
PBF Energy is a major independent petroleum refiner headquartered in Parsippany, New Jersey, established in 2008. It owns six refineries in the U.S. Northeast, Midwest, Gulf Coast, and West Coast, with a combined processing capacity of over 1 million barrels per day, making it one of the largest independent refiners in the United States. Its business model is "downstream" processing: purchasing crude oil from the market and refining it into products like gasoline, diesel, jet fuel, heating oil, lubricants, and petrochemicals, profiting from the "crack spread" between crude and refined product prices. Its profitability heavily depends on refining margins rather than the absolute price of oil. PBF Energy's sensitivity to Middle East tensions is more complex than Talos Energy's. Geopolitical conflicts pushing crude prices higher present a double-edged sword for refiners. During the recent Iran conflict, PBF Energy's stock nearly doubled, driven by market expectations of tightening refined product supplies and widening refining margins. Should ceasefire talks lead to an anticipated narrowing of these refining margins, PBF Energy could face more significant downward pressure.
Previously, Control Empresarial de Capitales made significant purchases of PBF Energy stock during the pandemic when gasoline demand was low. Subsequently, in 2022, as the global economy reopened and the Russia-Ukraine war disrupted refined product supplies, the investment firm reaped substantial profits from this investment. According to market data, the price at which the firm sold PBF Energy stock this year was, at its peak, 268% higher than its 2020 purchase price. This divestment also marks the Slim family's first sale of Talos Energy shares since becoming a shareholder in 2023. The most recent sale occurred on April 7, where the family sold PBF Energy shares at prices up to $47.50 per share, approximately 70% higher than the stock's price at the end of 2023. Representatives for Parsippany, New Jersey-based PBF Energy and Talos Energy, which holds one of Mexico's most promising energy projects, did not respond to requests for comment.
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