The King of Oil: The Secret Lives of Marc Rich

ACKNOWLEDGMENTS
     
    I couldn’t have written this book without the help and the advice of dozens of people I didn’t know when I started. These oil and commodities traders, who had worked with Marc Rich in one capacity or another during the last forty years, shared their thoughts and their memories with me, opened doors and documents, and explained the technicalities of trading and financing. They tried to show me the big picture, and they revealed their little secrets. Most of them want to keep a low profile and don’t wish to read their names in a book. I thank you all for trusting me so much without knowing me before.
    Arthur Klebanoff was the best agent and counselor imaginable: highly professional and motivated, truly knowledgeable, and with a good sense of humor. Phil Revzin, Senior Editor at St. Martin’s Press, believed in this project from the moment we talked about it for the first time. Roger Köppel, the owner and editor-in-chief of my journalistic home
Die Weltwoche
, generously granted me a long leave of absence from my position as Business Editor. I owe them my sincere appreciation.
    Several friends and colleagues took the time to ask the right questions and to review, discuss, and improve the manuscript. They proved their friendship by being critical.
    Among those who helped me, in various ways, to realize this book, my heartfelt thanks go (alphabetically) to Avner Azulay, Stefan Barmettler, Simon Brunner, Peter Hänseler, Pia Hiefner Hug, Christian König, Thomas Kramer, Michael Krobath, Monika Meili, Isaac Querub, Karin and Christoph Rothenhöfer, Ursula Santo Domingo, Jun Sarbach, Danny Schaechter, Peter Schildknecht, Doris and Jakob Schildknecht, Markus Schneider, Stefan and Lydia Spohr, Christine Steffen, Gabriele Werffeli, André A. Wicki, Jodok Wicki, Mark Willard and Tradukas, Bruno Ziauddin, Dave Zollinger, and Alain Zucker. I wish to mention particularly Hans Jörg Brun, without whose support and insights this book would not exist.
    My deepest gratitude goes to my parents Margrit and Josef Ammann-Mahler, who always believed in me and taught me to make up my own mind. And most of all to Irene Schildknecht Ammann, the best wife, and to Emilie, the best daughter, for their love, for their encouragement, and for their (much needed) patience.

 
    The
KING
of
OIL
     

 

     

The
UNDISPUTED KING
of
OIL
     

    O
il. Black gold. The “world’s most controversial resource” has created the mighty dynasties of the Rockefellers and the Gettys. 1 It has tempted dictators such as Saddam Hussein into acts of aggression and brought down emperors such as the shah of Iran. Even today, countries are prepared to go to war to secure access to this strategically important resource. Without oil, there would not be an airplane in the sky or a car on the road. Without oil, hospitals would cease to operate and shopping centers would remain empty. Our modern economy is unthinkable without oil. Oil is the world’s most important source of energy. More important, it is the most important commodity of an industrial society. We live in the Age of Oil. We are “hydrocarbon man,” whose very survival would be impossible without oil. 2
     
    The spot market for oil was surely one of the most lucrative ideas of the twentieth century. Back when Marc Rich first began to snatch away a part of the global oil trade from the mighty oil corporations, crude oil cost2 per barrel. In summer 2008 a barrel went for a record140. 3 Marc Rich’s undertaking was revolutionary—and highly successful. In the 1970s, Rich and a handful of trusted partners single-handedly managedto break the cartel of Big Oil, a cartel that dominated every aspect of the oil trade from the well to the gas pump. They created the first fully functioning, competitive market. They invented the spot market. Thanks to the oil trade, Rich—who came to the United States as a poor Jewish refugee boy—became one of the world’s richest and most powerful commodities traders. He advanced to become the “undisputed King of Oil,” as one of his longtime associates referred to him.
    The high point of Rich’s power was soon followed by his fall from grace, a fall that cost the billionaire his reputation, his wife, and his company. Marc Rich is not known the world over as a result of his amazing entrepreneurial achievements, which were many. His name does not ring a bell because he was a unique pioneer of globalization, which he was. His name is not bound to