The King of Oil: The Secret Lives of Marc Rich

Rich’s employee in Kingston in those days is of a wholly different opinion: “The Jamaicans are eternally grateful to us,” he told me. “We gave them back their pride, the Alcoa facility was once more able to turn a profit, jobs were saved, and we made a really good deal.”
You give a value and you receive a value.
South African Stratagems
     
    It seemed to be a normal transport like any other. The
Dagli
, a Norwegian tanker, docked in Odessa on September 21, 1988, where she took on a cargo of Soviet oil. The shipping documents listed the destination as the Italian harbor of Genoa. The
Dagli
sailed across the Black Sea and through the Bosporus Strait past Istanbul. The tanker had just reached the Mediterranean when her captain received a telex advising him of achange of plans. According to telexes in the author’s possession, the ship’s charterer ordered him to set course for Cape Town in South Africa. From that moment onward, the captain was only allowed to identify the
Dagli
on the radio as “MFI,” and all further communications were to be carried out using secret code. He was prohibited from disclosing the ship’s cargo or the destination. The telex’s wording was quite clear: “Any all communications are to refer only to bunkering operation with no reference whatsoever to cargo discharge, vessels [
sic
] name or loadport. Under no circumstances should vessel use usual call sign.” Three weeks later, on October 15, 1988, the
Dagli
sailed into harbor at Cape Town. She was virtually a ghost ship—her name was covered with a tarp, and her Norwegian flag had been taken down. She secretly discharged her cargo of oil in Cape Town before disappearing nearly as soon as she had arrived.
    There was a reason, of course, for all of this secrecy. The oil’s true owner was Marc Rich, and the arranged purchaser was the government of South Africa. The oil itself came from the Soviet Union, which officially boycotted the racist apartheid regime and had broken off diplomatic relations with the country as of 1956. It was a typical state of affairs in which Rich again served as a sort of “crude middleman” who bought sensitive commodities from sensitive sellers and sold them to sensitive buyers. He was able to bring together countries that no longer maintained an official relationship with one another.
    South Africa’s survival depended on middlemen such as Rich. The Iranian revolution was a catastrophe for the South Africans. In February, 1979, the mullahs in Tehran broke off all diplomatic and economic contacts with South Africa. The National Iranian Oil Company contractually forbade its customers from delivering a single drop of oil to the apartheid state. In the years before the revolution, South Africa had obtained 90 percent of its oil from Iran. 15 The shah had continually refused to take part in the Arab nations’ sanctions against South Africa, such as the 1973 boycott. The shah had wanted to become a powerhouse of the oil trade and was happy to sign large (and independent) contractswith new customers. Furthermore, Mohammad Reza Pahlavi’s position could be explained by the special relationship he maintained with the government in Pretoria. His father, Reza Shah, was forced to step down by Great Britain and the Soviet Union in 1941 before being forced into exile. Reza Shah spent his final days in Johannesburg, where he died in 1944. As strange as it might sound, Iranians were granted special status as “honorary whites” under the racist laws of the apartheid regime.
    Few countries were willing to continue supplying South Africa with oil. In addition to the Arab boycott, the United Nations General Assembly also enacted an oil embargo against South Africa in a series of resolutions in 1977. In truth it remained a voluntary boycott, and the UN Security Council never made it a binding resolution. 16 Nevertheless, most oil-producing nations enacted embargoes—at least officially—and the larger oil companies stopped dealing with South Africa. In 1986 the United States enacted the Comprehensive Anti-Apartheid Act, which prohibited U.S. companies from supplying South Africa with oil. 17
    South Africa’s salvation came in the form of Marc Rich—with a hefty surcharge, of course. Rich’s companies had very good contacts in South Africa, and a young Briton living in the former Commonwealth country was in charge of company affairs: Alan Fenton, who had changed his name from Felsenstein. Fenton took care