The Oil Market Truth Nobody Talks About - Abed Aish Breaks It Down

Speaker A: Foreign.

Speaker B: Welcome to Power Talk Show. Powered by business talks weekly. Our, uh, guest today is growing and leading the business of retail, supply and wholesale of fuel and energy back in California. He is the chief operating officer of AAA Corporation, Abed Esh. Abed, welcome to the Power Talk Show.

Speaker A: Thank you for having me.

Speaker B: It is our pleasure. Abed. Abed I want to first start the conversation by having a point of view on fuel and energy market look like currently in this geopolitical tension and economical crisis.

Speaker A: Oh, there's a lot of moving pieces geopolitically, of course. I don't even know where to start really. What's most important. I guess the Middle east right now is a really hot topic and I can't really elaborate too detailed about it, but we're all watching about what's going to happen with Iran. You have the situation between Russia and Ukraine, which is important as well for the price of fuel. Venezuela, of course, was a big shock to the market. So all of these things have moved the price of oil in their own way. Now, where the price of oil is today is actually surprising to me because you would expect with some of these wars that are continuing to still go on, uh, and the tension in the Middle east, you would expect the prices to be over a hundred dollars a barrel. But currently we're about half of that really. And it's shocking to me. What it says is just demand as a whole is not there throughout the whole world. Right. Uh, we've heard stories of how China was buying heavily for years, building up their reserves. That buying has slowed down quite a bit. The price is reflecting it. And with all the geopolitical problems that we're having and the price where it's at tells me that demand is pretty weak currently.

Speaker B: So where does AAA come into play and what is your role in leading and growing?

Speaker A: The company corporation is a fuel distributor or a wholesaler or a, uh, retail operator. We are based in California. We do business in other states as well. But we are grounded really in California, most of that. That's where most of our business is. So we work on the refined side of the product. So the crude is brought in, it's refined at the refineries, and then what comes out of it is mostly gas and diesel, some jet, but we deal with mostly gas and diesel. Uh, we're supplying it to retail sites for the most part. And we also serve it to our consumers, which are the guys who come in and fill up gas at their gas station. At our gas stations.

Speaker B: Yeah. So, you know, as you mentioned, that there, there are traditional gas stations. And here in uae, we also have fuel on demand, where if you are stuck anywhere or if you give a call, a van comes in with the fuel of your choice. Do you think fuel on demand is a market to grow?

Speaker A: You know, I've. I got to look at it pretty early on, which is exciting. I'm in the Bay Area, so, like, startups are everywhere. I mean, you see these startups popping up every, literally at coffee shops, speakeasies, whatever you have. And, uh, I got to take a look at it firsthand early on. And in some marketplaces, it makes sense for fleet fueling. I think it makes a lot of sense because rather than having your drivers take your vehicles to the nearby gas station and filling it up, that costs you time from the driver. And that time adds up. When you have five drivers taking their vehicles out and spending 15 minutes filling it up at the gas station, it adds up, right? Versus one van or truck pulling up to your yard, topping them all off and then going. So there's a value to that. I just, I don't know. I don't really see, uh, that market doing too well. I guess it depends on regulation because it's also a lot cheaper to get your tank at your own facility and then have somebody deliver to that tank. So you can hedge it, market that. I mean, there's a lot of different avenues to go about it. But I think it's interesting, if it scales out correctly, it will be successful for sure. I mean, for campuses, that's where it's going to be at.

Speaker B: And what about the EV industry? How does that have an impact in a petroleum sector?

Speaker A: EVs have definitely made an impact in demand. We're in. Like I said, in California, there's a ton of electric vehicles on the road over here. I believe the last statistic I saw was one in five new vehicles electric. I see the trends falling off. I didn't check California's recently, but the United States as a whole has seen a slow in that in the purchase of new EV vehicles versus ICE vehicles. And I don't think EVs are great vehicles, honestly. They're very cool and they had a moment. But ICE vehicles are great vehicles. I mean, you look at EVs and the depreciation of these things is insane. So you may be saving some money on the energy that the car uses. For now, electricity prices are going up as we speak and gas prices are coming down. So I don't know if it's really much of a savings anymore. But the fact that you lose so much value on the vehicle is insane. It's just, it's really disgusting. But the, the one that's having the biggest impact on our business is definitely the hybrid vehicles. These things that are getting like 60 miles per gallon or more. It's not going to kill our business. Right. Because they still use gas. But those are definitely very concerning, I would say. So, yeah, hybrids are great, great point of view.

Speaker B: So Abed, you know, as a leader of a petroleum distributor and industry, what is the biggest challenge you face in growing your business?

Speaker A: Well, where I'm based at California has a lot of, uh, special rules. We have a boutique blend of fuel where it is better for the environment, but it's more hard to come across. So there's a lot of volatility in our market and that volatility is what keeps prices high. I mean, people are pricing in the fact that there could be a spike in price overnight. I mean, it could be as great as 50 cents per gallon. And that, that could wipe out any business around the country, around the world. I mean, margins aren't $0.50 per gallon at retail sites. So if you had a jump like that, it could really set you upside down. And then on a bigger picture from the wholesale side of things, when you see prices move the way they do up and down, so drastically changes a few things. One, we have commitments with our oil and the refined products that we do buy, but we also have commitments with our, uh, logistics, car and our partners on the fleet side of things. We can't just have those guys bring out a workforce to do work for us on the transportation side. And then if the market is dropping like off a cliff, say, hey, you know, just have those guys sit at the office doing nothing. And these people are hiring drivers to come in to do work. So we want to be mindful of everything. And the refineries can't just turn off because the market is sliding. So they have to keep those things running and we have to keep our word. If we say we're going to load whatever it is, 2,000 barrels, we need to pick up those barrels and take it on the chin. And on the days where it's spiking up, it makes up for it. So we just kind of take it with the as the wind goes, basically.

Speaker B: Absolutely. And you know, I believe it is high capital intensive business to put in the refineries and the infrastructure into place. And Abed, you, you are a family run business. How does the structure and operational work in a family run Business.

Speaker A: The president of the company, the founder, is my dad WISFI and he started the business over 40 years ago, really with very little experience. Learned it the hard way and just trial and error, hard knock. He built a really good business network, uh, of gas stations and he learned how to delegate his work which is great. Picked good people to help him build the business up and trusted them and gave him responsibilities and it gave him the ability to go out and find new avenues and new opportunities. Now the structure of our business is he's our president. He is the one who's going to make the final decision on deals and how we operate our day to day and our long term growth. I'm just here to help him accomplish those goals in any which way I can. I definitely have my opinions of how we do things and navigate them, but he's the final word on things. So what the how we operate is, you just gotta kind of know what your position is. I, I do see a lot of like uh, family businesses where the next generation, the successors are eager to just make decisions right away. Uh, I was very fortunate. I started a business early in my career with some friends and I remember when I first really made some money for myself and I go, wow, nobody's going to tell me how to spend this money. Like I made it myself. And so I was like, you know what, that's how I feel about my money. I'm sure my dad has the same feelings about his money as well too. So I just let him do it how he wants to. It's his money. He cares about it more than probably anybody else on the planet and uh, have a ton of respect for him on that front. So when I learned that and when I put that mindset on, it really was the moment when I learned how to let him be the leader. And it changed how the company operates really. Like just following the leader and doing what they say, giving them your input. I mean don't just sit there and follow them of course. Bring your ideas and your suggestions, execute. Give them feedback on what decisions they have made. That is what a good team player does. And leading through example. Like I'm putting in as much work as him. Uh, my biggest competitor, I say, is my dad. So I try to outwork him every day. And the rest of the team sees how hard we both work and they follow along with us. It's great.

Speaker B: That's very interesting because you know, you mentioned about you being the next generation entrepreneur. How would you describe your leadership style?

Speaker A: I lead by example. Absolutely. I'M not. I don't like to lead with fear. I prefer to earn people's respect and persistence and like grit really just helps you push to the next level of whatever challenge you may be dealing with at that time.

Speaker B: That's very interesting. And what would be your vision for the next three, five years? What would you be your vision to growing the company?

Speaker A: Well, we're in an interesting time. You see headlines all the time about AI and how it's changing the world. We uh, are insulated a little bit. I mean AI is not going to produce gasoline I don't think. I don't, I can't really imagine how that's going to happen. Or diesel for example. It may be able to deliver it in a different type of form. I mean we have robotic vehicles. Waymos are all over the place. Maybe trucks will start doing it. I don't know how they're going to deliver it in tanks. So the direction of the company I think is intact. I think we will continue to be a retail operator and a fuel distributor. Fuel distribution. One of the challenges, and you mentioned it earlier, is financing. Financing is always a big hurdle like you have to have. It's really, you need a ton of money to really make sure you are in and out of these markets at the right time. So I think AI is going to help us a lot and I think it's really just going to make our business more efficient. And as long as we stay on that bleeding edge of the technology, we'll be able to pass along those savings to our customers. Because if we can, we can save ourselves some money. It's a volume driven business. We will pass it on to the customers to try to get more of that business out there. It's good for everybody.

Speaker B: Yeah, absolutely. Are you using any AI models on your day to day?

Speaker A: Everything you can, I swear. And like I said, I'm in San Francisco. The Bay Area is definitely the home from what I could tell on A.I. uh, people are coming here from all over the world. We have the biggest companies like within a stone's throw away from us in A.I. uh and you, you hear some good conversations and a lot of people are open to sharing suggestions. Not maybe necessarily like proprietary things but they're, they're helping me a ton and been invited on some opportunities as well, which is exciting. It's really a fun space.

Speaker B: That's very interesting. And you know, you, you, you being going and leading a company and we spoke about AI as well. What would be your advice to new entrepreneurs and founders? Lead Company.

Speaker A: Oof. Uh, my advice right now would be, if you have the time, like, if you're not, if you're starting a business and you, you have a good idea, there's going to be a lot of solutions that are out there to help you get that startup running off the ground. And a lot of, like, things that can, like, hey, I. You can go to websites and they can build you a website, they can build you a scheduling platform, they can build all sorts of things. Now there's subscription models. I say if you have the time, invest it back into yourself by using some of these AI models to develop some tools that can help you operate where you're not paying a monthly subscription anymore, where you're not relying on somebody else. And it's really about investing in yourself. The best thing you can invest in as an entrepreneur is yourself. Whether it's your education or it's just learning on your own, but really investing in yourself and taking your money and putting it to work as well, but putting it on yourself. Not buying a share of a stock or something like that, like really just taking the time. Buy a subscription to a premium subscription to an AI model and leverage what ideas you have and feed it to this thing, see what it can do for you. These things can build you, like I said, websites, applications, all sorts of things. So if you have the time available to yourself, play with it and see if you can save yourself that monthly subscription. Because some of these tools that are out there that I've seen for startups like five, six hundred dollars a month, and you're looking at this thing like, that's six grand a year. I could keep that in my pocket if I can build something that's robust enough to handle my workflow.

Speaker B: Absolutely makes sense. One, one piece of advice, uh, you received that changed your perspective professionally and personally.

Speaker A: You know, one piece of advice that I received that changed my perspective personally and professionally is always have an exit strategy. And I learned this when I first started my business with my friends from high school. We were about 21 years old, so we were in college, uh, but these were my friends from high school. When I came back from college, a friend of mine said, have an exit strategy. And I said, you know, I looked at him with pure confidence that nothing's gonna get between me and my friends. Like, this is love. And, uh, he said, well, you never know what will come out. You never know, so just have a plan. And he was right. But I was also right. The business did not stay together for long, but our friendships never were hurt by it. Just things went separate ways. So now when I look at things, I try to have an idea of what I think. Like, when you're buying something, you're buying it because you think there's. It's undervalued, so. Or you can add more value to it. Right. So when you have an idea of what something's worth, you want to say, okay, once I get it to where it's worth what I believe it's worth, what do I want to do from there? Like, do I want to sell it? Do I want to bring in partners and grow it even further? What do I want to do? Um, so having an exit strategy changed my thought process on how I do basically anything for. In terms of investment.

Speaker B: Yeah, absolutely. That's some great piece of advice. And thank you a bit. Thank you so much for giving us time today and joining a channel. It was a wonderful conversation. Thank you.

Speaker A: Thank you. Uh, it was a pleasure. Thank you. And you're doing very well, so I'm excited to see the growth with your channel as well.