The King of Oil: The Secret Lives of Marc Rich

meet. On Sundays and after school, Pincus went from door to door selling candy from his little wagon. He attended a Jewish school in Brooklyn. At the age of sixteen he left high school and went to work as a stockboy stocking shelves in Manhattan’s Garment District. He then got a job in the mailroom at Philipp Brothers and followed the same career path as all traders before him and Marc Rich after him. After serving in the army from 1955 to 1957, he married his lifelong love, Libby, in 1957. The two still live together and are the parents of four adult children.
     
    The moment he heard of Rich’s plans, Green was hooked on the idea of trading oil as if it were any other commodity. The two formed a disparate pair, for their characters could not have been more different. The cosmopolitan Rich did not believe in God, as he confided to me, favored a nice glass of wine, and wore tailor-made suits. Green, on the other hand, was deeply religious and would still live in a modest stucco housein Flatbush, a Brooklyn neighborhood inhabited mainly by Jewish immigrants, when he was a millionaire.
    They were the perfect embodiment of the old saying about opposites attracting. Together they would revolutionize the global commodities trade.

 

     

ISRAEL
and the
SHAH
     

    T
he traders who would soon shake the global oil market had a rather humble start. “We did one or two transactions with Tunis,” Rich remembers. They made a profit of60,000, which, although not exactly overwhelming, showed their bosses that there was money to be made in crude oil. Jesselson and Rothschild were open to the idea in principle, but they tended to be rather conservative and warned Rich of the potential dangers. They were aware of the inherent risks in the capital-intensive oil trade, as a failed deal could spell ruin for a company.
    Rich had an idea that would later prove to be a stroke of genius. This idea would soon transform Philipp Brothers into a powerhouse of the international oil trade, and it speaks volumes about Rich and his successes. He suggested a deal between two parties who—at least officially—would have nothing to do with one another. It was a highly secretive and politically explosive deal, which remains shrouded in secrecy to this day.
    I first heard of the deal when I interviewed Rich’s former high-ranking employees in Madrid. I had wanted to know how Rich had managed to break into the oil-trading business so quickly. I got alongquite well with one of these traders due to a shared passion for Africa. We were discussing whether Africa would one day be able to pull itself out of its poverty and misery, and we came to the conclusion that the continent could only do so on its own and not with the help of foreign aid. Suddenly he made a tapping gesture with his index finger and asked me to turn off my tape recorder.
    Under the pledge of secrecy he proceeded to tell me an almost unbelievable tale. It was the story of an Iranian-Israeli oil pipeline that ran from Eilat—Israel’s gateway to the Red Sea—to Ashkelon on the Mediterranean coast. It was thanks to this pipeline—and thanks to his cooperation with Iran and Israel—that Rich was able to get his foot in the door of the global oil trade.
Top-Secret Pipeline in Israel
     
    To this day the Iranian connection to the oil pipeline is one of Israel’s best-kept state secrets. 1 The pipeline was an attempt to solve one of the Jewish state’s greatest strategic challenges, one that threatened the nation’s very survival: access to a steady supply of oil. There’s an old Israeli joke: Moses wandered the Middle East for forty years—and finally settled in the only place without any oil. Israel’s oil-rich enemy neighbors were keen to keep the country from gaining access to this important raw material. Up to 90 percent of Israel’s oil imports came from Iran. The Persian country, which is not Arab, had secretly supplied Israel with the black gold since the middle 1950s. 2
    In the summer of 1965, Golda Meir, then Israel’s foreign minister, visited the shah in Tehran. She suggested the two nations cooperate in the construction and management of a pipeline. The meeting was top secret, as Iran did not officially recognize Israel. The shah had his own regional interests, and he had no desire to damage his relationship with the Arab world. The Arab nations considered Israel a pariah, and together they had organized a boycott of Israel. Nevertheless, the shah, whomthe