The King of Oil: The Secret Lives of Marc Rich

did.”
    Rich realized that if the oil-producing countries wished to break the dominance of the corporations, they would need independent traders like him. They simply did not have the means—the marketing know-how, the established distribution channels, contacts to the refineries—to market the oil themselves. Rich knew that he could offer all of these by utilizing Philipp Brothers’ worldwide organization. He wanted to repeat the successes he had enjoyed trading mercury. He wanted to create a market.
    Yet Rich had to deal with three important problems. First he had to get the oil. Then he had to find a buyer. The most difficult problem of them all was the delivery: How could he get the oil to the buyers? The handling and transportation of oil was much more complicated and expensive than transporting metals. Oil is a liquid with varying degrees of viscosity, and it can easily be lost as a result of evaporation or leakage. The physical characteristics of oil can change during transportation and according to temperature. Oil was also traded in huge quantities, and that meant one needed a lot of credit. Oil required special ships, and oil trades were conducted more quickly than other commodity trades. Whereasthe time of delivery was not as crucial when it came to trading in bauxite, manganese, or copper, time was of the essence when it came to the oil trade.
    Every trader knows that the most important element of a deal is the execution of the trade. One of the world’s most experienced traffic managers introduced me to the art of trade execution. Like many of my interviewees, he wished to remain anonymous. He even insisted that I leave the name of our meeting place out of this book. I wanted to know why he felt such an intense need for secrecy. “It’s better for me and my business if no one knows who I am,” he told me straight out.
    “As a trader it is possible to close a fantastic deal,” he said, “but it isn’t worth anything if the execution goes wrong. Even worse: Every mistake can spell disaster. I’ve seen it all. For example, you might have a bad letter of credit that results in the cargo being delivered much later than planned or not at all. Or you might charter a ship and suddenly the ship is not allowed to enter the destination port. The deal would fall through, and you might lose millions or have to pay enormous demurrage or storage fees, all because you didn’t do your homework.”
Pincus Green
     
    If Rich wanted to get into the oil business with the goal of creating a free market, he would need an expert in trade execution. He knew he needed his own logistics system, and he knew immediately who was most qualified to set up such a system: Pincus “Pinky” Green. Green would soon become one of the most important people in Rich’s life—his alter ego, so to speak. He had been working in the European headquarters of Philipp Brothers in Zug, Switzerland, since 1965. He was considered by many to be a logistical genius with a photographic memory. At any given moment, Green always knew who was offering the best shipping rates or where a shipment was currently located during transport.
    Green is only a few months older than Rich, and the two have amazingly similar family backgrounds. Green was born in the middle of theGreat Depression on March 11, 1934, in Brooklyn as the seventh of eight children. His parents, Sadie and Israel Green, fled from the Ukrainian part of the Soviet Union to the United States in the early twenties. The 1917 October Revolution had marked the beginning of a bloody civil war that would last until the winter of 1920–21. Several armies took part in the fighting—the Ukrainian army, peasant irregulars, the Red Army, and the counterrevolutionary White Guards. Terrible massacres were carried out against Ukraine’s Jews. There were twelve hundred pogroms, 530 Jewish communities were attacked, and sixty thousand Jews were murdered. 7 Those Jews who were able to escape fled the country.
    Israel Green ran a successful grocery store in Brooklyn that provided the family with a comfortable standard of living. Their success would not last long, however. Their bank collapsed on Black Tuesday, and the family lost everything in the 1929 economic crash. It was difficult enough to find a new job in those days of mass unemployment and mass poverty, but for Green, an Orthodox Jew who didn’t work on Saturdays, it was virtually impossible. His four sons had to help the family make ends