The King of Oil: The Secret Lives of Marc Rich

Israelis referred to by his cover name “Landlord,” signaled that he was prepared to enter into secret negotiations. The Iranians were represented by the National Iranian Oil Company (NIOC), and the Israelis sent high-ranking government representatives as well as members of the Mossad to the talks—a fact that underscored the project’s immense strategic importance.
    Two years later the negotiations finally reached a turning point. President Nasser’s closure of the Suez Canal in the wake of the Six-Day War convinced the shah that the pipeline was in Iran’s strategic interest. Mohammad Reza Shah Pahlavi realized that the closure threatened Iran’s main transport route, since Iran shipped three out of four barrels of its oil through the Suez Canal. 3 The closure threatened his plans to transform Iran into the region’s dominant oil-producing nation. The shah, as the leader of the only non-Arab OPEC member nation in the region, also saw the presence of Egypt’s Arab allies on Iran’s doorstep as a hindrance to his desire to serve as a counterbalance to President Nasser. Thanks to the pipeline, Mohammad Reza Pahlavi could lessen his dependence on Egypt and the Suez Canal.
    Israel and Iran agreed to set up a fifty-fifty joint venture, and together the two countries founded Trans-Asiatic Oil Ltd. in Switzerland. The shah demanded that Iran’s participation in the company remain a secret. When asked, the official answer from Iran would always be the same: “We do not sell oil to Israel.” Trans-Asiatic operated the pipeline, the oil terminals, and oil containers in Eilat and Ashkelon, and it even maintained a fleet of tankers to transport the oil.
    The pipeline, 254 kilometers long and 106 centimeters in diameter, was completed in 1969, and in December of the same year the first Iranian oil began to flow. Ten million metric tons of oil were transported through the Israeli pipeline in the first year. Israel bought 3 million metric tons for its own supply. The Iranian navy accompanied the tankers from the ports of lading to the Strait of Hormuz, and the Israeli navy guarded the ships’ entry into the Gulf of Aqaba at the Straits of Tiran.
    The pipeline was what game theorists would call a “win-win situation”—a solution of equal benefit to both parties. “Thanks to the pipeline, the shah was able to gradually outrival the multinational oil companies and become a powerful force in the oil trade,” a participant in the deal told me. NIOC was able to freely sell its oil on the open market for the first time ever. The shah made a lot of money and could continue to feed his extravagant lifestyle. Furthermore, the pipeline was a useful tool in his struggle to gain greater control over the oil companies. Israel, on the other side, earned good money on the transit fees for the pipeline and was at the same time able to secure a constant supply of oil.
Trading with the Shah of Persia
     
    Rich wanted to go into business with the shah of Persia and find buyers for the Iranian oil that passed through Israel. It was the bold idea that would later become his great success. Rich’s cometlike ascent could never have happened were it not for this deal, and, according to a well-informed insider, it was the true foundation of Rich’s enterprise. Insiders also know that Rich could never have become the biggest independent oil trader in the world without the help of Pincus Green. “Marc is the visionary, Pinky makes things happen. It’s impossible to think of one without the other,” said a friend who has known both of them well for many years. This is primarily—but not solely—connected to Green’s skills as a traffic manager. It was Pinky, as all his acquaintances call him, who was able to make the crucial contacts in Iran. These contacts formed the basis for the company that would become Marc Rich + Co. AG. Iran played such an important role in Green’s career that he named the family office, i.e., a private company managing the family wealth, that he constructed after his retirement, Yeshil Management AG.
Yeshil
is the Farsi word for green.
    Pinky Green was indicted in 1983 on exactly the same charges as Marc Rich, and he was pardoned in 2001 by President Bill Clinton atexactly the same time. Nevertheless, he has to a large extent managed to keep out of the headlines. Googling his name turns up a mere 6,710 hits, compared with a whopping 230,000 hits for Marc Rich. 4 Even his opponents can only find nice