The World for Sale

The World for Sale Plot Summary

Introduction

In the early hours of February 22, 2011, as Libya descended into civil war, a small team of oil traders from a company called Vitol gathered in a London office to make an extraordinary decision. While most businesses were fleeing the conflict, these traders were planning to send fuel shipments worth over $1 billion to the Libyan rebels. Without formal diplomatic recognition, military support, or guarantees of repayment, they were about to finance a revolution. This high-stakes gamble would eventually pay off handsomely, but it exemplifies the outsized yet largely invisible role commodity traders play in shaping world events. For centuries, a small group of merchants has controlled the flow of essential raw materials that power modern civilization. Operating in the shadows between producers and consumers, these traders have amassed enormous wealth and influence while remaining virtually unknown to the public. They've financed wars, propped up dictators, enabled industrial revolutions, and occasionally crashed entire economies. The stories in these pages reveal how commodity traders have repeatedly changed the course of history, from fueling the Soviet economy during the Cold War to enabling China's meteoric rise. Whether you're interested in geopolitics, economics, or simply how the hidden mechanisms of global trade actually function, understanding these shadow titans provides essential context for making sense of our world.

Chapter 1: Pioneers of Risk: Breaking Cold War Barriers (1950-1970)

The period following World War II marked a transformative era for global commodity trading. As Europe and Asia rebuilt from devastation, demand for raw materials skyrocketed, creating unprecedented opportunities for merchants willing to navigate the complex geopolitical landscape of the emerging Cold War. The years between 1945 and 1970 saw the birth of modern commodity trading as we know it today. At the forefront of this transformation was a German entrepreneur named Theodor Weisser, who in 1954 accomplished what seemed impossible: establishing regular oil shipments from the Soviet Union to Western Europe. At a time when Cold War tensions were escalating, Weisser's company Mabanaft negotiated a deal to move Soviet oil through the Iron Curtain, creating the first major East-West energy trade route. This pioneering arrangement required not just business acumen but diplomatic finesse, as Weisser had to navigate the suspicions of both American allies and Soviet officials. Meanwhile, in New York, a metals trading firm called Philipp Brothers was evolving from a modest operation into a global powerhouse. Under the leadership of Ludwig Jesselson, the company expanded beyond traditional metals trading into new commodities and regions. Philipp Brothers traders developed a distinctive approach: they traveled extensively to remote mines and production facilities, building personal relationships with suppliers and gathering firsthand market intelligence that gave them decisive advantages over competitors. The trading landscape was further transformed by the emergence of agricultural trading giants like Cargill and Continental Grain. These companies capitalized on growing global food demand, with Cargill establishing Tradax International in 1956 to handle its international grain shipments. The pinnacle of this era's agricultural trading came in 1972 with the "Great Grain Robbery," when Soviet traders secretly purchased 10 million tons of American wheat, depleting US reserves and causing global prices to skyrocket. This event demonstrated the enormous power commodity traders wielded in global markets. What distinguished these pioneer traders was their willingness to venture where others wouldn't. They developed sophisticated information networks long before the internet age, giving them market insights that were invaluable in an era when commodity prices could vary dramatically across different regions. They also mastered the art of arbitrage—buying commodities in one market and selling them in another for profit—and developed the financial tools needed to fund increasingly complex global transactions. By 1970, these pioneering traders had established the fundamental patterns that would define commodity trading for decades to come: a willingness to operate in politically sensitive regions, the ability to manage complex logistical challenges, and the development of sophisticated risk management techniques. Their legacy would be built upon by a new generation of even more ambitious traders who would emerge in the 1970s, led by perhaps the most influential figure in modern commodity trading history: Marc Rich.

Chapter 2: Oil Crisis and the Rise of Marc Rich (1970-1983)

The 1970s ushered in a revolutionary era for commodity trading, dominated by the rise of Marc Rich, a figure who would fundamentally transform how raw materials moved around the world. Born in Belgium to Jewish parents who fled Nazi Germany, Rich joined Philipp Brothers in 1954 and quickly distinguished himself with his exceptional trading instincts. By the early 1970s, he had become the firm's top oil trader, but his ambitions extended far beyond what the traditional trading house could accommodate. The defining moment came during the 1973-74 oil crisis, when the Arab oil embargo sent prices soaring from $3 to $12 per barrel. While most traders retreated from the volatile market, Rich recognized an unprecedented opportunity. He pioneered what became known as the "spot market" for oil—trading individual shipments outside the major oil companies' long-term contracts. This innovation broke the stranglehold of the "Seven Sisters" (the major Western oil companies) on global oil flows and created a more flexible, if volatile, global energy market. In 1974, Rich and his partner Pincus Green left Philipp Brothers to establish Marc Rich + Co., taking key staff and clients with them. Operating from Switzerland to minimize regulatory oversight, Rich's new company rapidly expanded into a global trading empire. Rich's traders were instructed to "walk on the edge of the knife"—pushing legal and ethical boundaries without quite crossing them. This approach led to spectacular profits but eventually to serious legal troubles, culminating in Rich's indictment in 1983 for tax evasion, fraud, and trading with Iran during the hostage crisis. Rich's business model extended beyond oil into metals, minerals, and agricultural products. In Jamaica, for example, his company provided crucial financing to the government when traditional lenders withdrew during the country's economic crisis. In exchange, Rich secured favorable terms for Jamaican bauxite and alumina, essential components for aluminum production. Similar arrangements were established across Africa, South America, and Asia, often with governments that Western institutions considered too risky or politically problematic. What truly distinguished Rich's approach was his willingness to trade with anyone, regardless of political considerations. He dealt with apartheid South Africa despite international sanctions, revolutionary Iran during the hostage crisis, and Communist Cuba when U.S. companies were prohibited from doing so. This political agnosticism—treating commodities as pure business divorced from ideology—became a defining characteristic of modern commodity trading. By the late 1980s, Rich had built a trading colossus that handled nearly 35% of the world's free market oil and dominated trade in numerous metals. His innovations—the spot market, oil-backed loans to producing countries, and sophisticated risk management techniques—had transformed commodity trading from a relatively straightforward business into a complex financial and logistical enterprise. Despite his legal troubles (he remained a fugitive in Switzerland until receiving a controversial pardon from President Clinton in 2001), Rich's methods were adopted throughout the industry, creating the template for modern commodity trading that continues to this day.

Chapter 3: Soviet Collapse: The Greatest Trading Opportunity

The collapse of the Soviet Union in 1991 triggered one of history's greatest economic transformations and created unprecedented opportunities for commodity traders. As the centrally planned Soviet economy disintegrated, control over Russia's vast natural resources—which included some of the world's largest reserves of oil, natural gas, aluminum, nickel, and other essential materials—was suddenly up for grabs. This chaotic transition period became known as "the biggest closing-down sale in history." Among the first Western traders to recognize this opportunity was a British company called Trans-World Group, led by brothers David and Simon Reuben. Working with Russian partners including the Chernoy brothers, Trans-World rapidly gained control over much of Russia's aluminum industry. By 1994, they controlled about 40% of Russia's aluminum production—equivalent to roughly 10% of global output. The company achieved this dominant position by providing crucial trade finance when Russian producers were desperate for hard currency, effectively becoming both the supplier of raw materials to Russian smelters and the purchaser of their finished aluminum. Meanwhile, Marc Rich + Co (later renamed Glencore after Rich's departure) established a strong presence in Russia's metals and oil sectors. The company's traders, including a young Ivan Glasenberg who would later become Glencore's CEO, developed close relationships with emerging Russian business leaders. These connections proved invaluable as Russia's privatization program transferred state assets to private ownership, often at a fraction of their true value. The period also saw the emergence of a new generation of Russian traders who would become enormously powerful. Gennady Timchenko, who had worked in Soviet oil export agencies, established oil trader Gunvor in 2000 with Swedish partner Torbjörn Törnqvist. Timchenko's reported close relationship with Vladimir Putin would later help Gunvor become one of the world's largest oil traders. Similarly, Roman Abramovich and other Russian entrepreneurs used their trading activities as stepping stones to acquire major stakes in Russian oil and metals companies during privatization. The methods employed during this period were often controversial. Business in post-Soviet Russia frequently operated in legal gray areas, with corruption endemic and violence not uncommon. Several prominent businessmen in the Russian aluminum industry were murdered during what became known as the "aluminum wars." Western traders maintained they were simply providing necessary commercial services in a challenging environment, but critics argued they were exploiting Russia's weakness and enabling the plunder of national assets. By the end of the 1990s, the landscape had changed dramatically. Many of the Western traders who had initially dominated post-Soviet commodity flows were pushed aside as Russians reasserted control over their natural resources. The Reubens sold most of their Russian interests in 1997, while other Western traders found their influence diminishing as the Russian state, particularly after Putin's rise to power in 1999, began reclaiming strategic control over the country's resource wealth. The Soviet collapse period demonstrated the opportunistic nature of commodity traders, who rushed in where more cautious investors feared to tread. It also revealed how commodity trading could serve as a pathway to enormous wealth and political influence in transitional economies. The lessons learned during this chaotic decade would prove valuable as traders turned their attention to the next great economic transformation: China's rise.

Chapter 4: China's Hunger: The Commodity Supercycle (2000-2010)

The first decade of the 21st century witnessed an extraordinary economic phenomenon that commodity traders had been anticipating for years: China's emergence as a manufacturing superpower and its insatiable appetite for raw materials. This unprecedented demand triggered what economists termed a "commodity supercycle"—a prolonged period of rising prices across virtually all commodities that transformed the global trading landscape. When China joined the World Trade Organization in 2001, its economy was already growing rapidly, but this milestone accelerated its integration into global markets. Between 2000 and 2010, China's GDP more than tripled, and its urban population swelled by over 200 million people. This explosive growth required enormous quantities of raw materials to build infrastructure, housing, and factories. China's consumption of copper increased by 350%, iron ore by 340%, and coal by 160% during this period. For oil, China went from consuming 4.7 million barrels per day in 2000 to 9.1 million by 2010, becoming the world's second-largest consumer after the United States. Ivan Glasenberg, who became CEO of Glencore in 2002, positioned his company to capitalize on this historic opportunity. "China is going to need everything," he repeatedly told colleagues. Under his leadership, Glencore expanded its coal trading operations dramatically, becoming the world's largest exporter of thermal coal—a crucial fuel for China's rapidly growing power generation sector. Similarly, Glencore invested heavily in copper mines in Africa, anticipating China's growing demand for the metal essential to electrical wiring and construction. The commodity supercycle created unprecedented profits for trading houses. Glencore's annual profits grew from around $400 million in 2000 to over $6 billion by 2007. Vitol, Trafigura, and Cargill saw similar explosive growth. These profits enabled traders to expand beyond their traditional middleman role into asset ownership. Glencore acquired mines, smelters, and refineries; Vitol purchased oil terminals and refineries; Trafigura built a global network of storage facilities and invested in African mining operations. This period also saw commodity traders expand their political influence, particularly in resource-rich developing countries. In the Democratic Republic of Congo, Glencore secured access to valuable copper and cobalt reserves through controversial deals with politically connected intermediaries. In Nigeria, traders developed close relationships with government officials that facilitated access to the country's oil exports. These arrangements often operated in legal gray areas, with accusations of corruption frequently surfacing. The financial crisis of 2008-2009 temporarily disrupted the supercycle but also demonstrated the resilience of commodity trading houses. While banks retreated from financing trade, companies like Glencore and Trafigura stepped in to provide crucial liquidity to producers and consumers. This expanded their role as financial intermediaries and further increased their influence over global commodity flows. By 2010, the commodity trading landscape had been transformed. The major trading houses had evolved from relatively modest intermediaries into vertically integrated giants with global reach and unprecedented financial firepower. Their success during the China-driven supercycle had made their executives and partners fabulously wealthy, with Glencore's partners collectively worth tens of billions of dollars. This wealth and influence would soon attract greater public scrutiny as these once-secretive companies were forced to become more transparent.

Chapter 5: From Shadows to Spotlight: The Glencore IPO Era

On a spring morning in 2011, traders began arriving at Glencore's headquarters in the Swiss village of Baar well before dawn. By 6:06 a.m., when the sun rose over the surrounding hills, the company's car park was packed. The reason for this unusually early start was simple: one of the biggest secrets in the commodities industry was about to be revealed – who owned Glencore, the world's largest commodity trading company. For decades, commodity traders had operated in relative obscurity, their ownership structures and profits known only to insiders. Glencore, the successor to Marc Rich + Co, had maintained this tradition of secrecy since its founding. The size of each employee's shareholding had been a taboo subject, with information delivered annually in white envelopes to shareholders. Even Glasenberg's closest lieutenants were in the dark about the full ownership structure. Now, with the publication of Glencore's IPO prospectus, this veil would be lifted. The scale of wealth revealed was staggering. Ivan Glasenberg, the CEO, owned 18.1% of the company, giving him a fortune worth $9.3 billion. Six other executives were also billionaires, with stakes worth between $2.7 billion and $3.5 billion each. The top thirteen employee-partners, who had owned 56.6% of Glencore before the IPO, were collectively worth $29 billion. Dozens more held stakes worth tens or hundreds of millions. The IPO had crystallized the enormous riches accumulated during the commodity boom, turning previously anonymous traders into some of the wealthiest people on earth. The flotation marked a pivotal moment for the industry. By going public, Glencore had invited unprecedented scrutiny not just of itself but of the entire commodity trading sector. "It was as if Glasenberg had flipped a light switch and illuminated an entire industry," observed one market participant. Journalists, regulators, and activists suddenly had a window into the activities of companies that had previously operated in the shadows. The traders would no longer be able to go unnoticed as they wielded their enormous financial power around the world. Glencore's decision to go public reflected fundamental changes in the trading business. Information was becoming faster, cheaper, and more widely available, eroding the informational edge that had historically allowed traders to outmaneuver the market. An increasingly transparent world made it harder for less scrupulous traders to profit through corruption or bribery. And the miners and oil majors who were their principal suppliers had consolidated, leaving fewer large players who had little need for traders as intermediaries. The IPO also reflected Glasenberg's ambition to transform Glencore from a pure trading house into a mining giant. The company used its new access to capital to pursue aggressive expansion, culminating in a $90 billion merger with mining company Xstrata in 2013. This deal, following a bitter corporate battle between Glasenberg and Xstrata CEO Mick Davis, created a "new powerhouse" that was not just the world's largest trader of commodities but also one of the largest producers of natural resources on the planet. Other trading houses followed different paths to raise capital while maintaining more privacy. Trafigura, Louis Dreyfus, and Gunvor issued bonds rather than shares. Vitol partnered with sovereign wealth funds and private equity. But all were forced to reveal more information about themselves than ever before. The era of complete secrecy was over, and the commodity traders had to adapt to a world in which their activities would be increasingly scrutinized by investors, regulators, and the public.

Chapter 6: Political Kingmakers: Financing Nations and Conflicts

In March 2018, a terse notice appeared on the Cayman Islands Stock Exchange that would have meant little to most observers. It stated that "as a result of the independence referendum held by Kurdistan Regional Government," oil exports had decreased by almost 50%, affecting the ability to meet contractual obligations. What few realized was that this notice connected the retirement savings of American teachers in Pennsylvania, South Carolina, and West Virginia to one of the most volatile regions in the Middle East. The complex financial structure behind this notice revealed how commodity traders had evolved into powerful financiers of resource-rich nations. The investment vehicle, controlled by Glencore, had channeled $500 million from American pension funds to the semi-autonomous Kurdish region of northern Iraq. This money had helped the Kurds achieve economic independence from Baghdad, ultimately emboldening them to hold an independence referendum in 2017. As Ashti Hawrami, Kurdistan's minister for natural resources, acknowledged: "The economy can take a lead ahead of politics and force politicians to take decisions." This was just one example of how commodity traders had deployed their newfound financial might. The combination of boom-time profits and expanded access to capital markets gave them the ability to finance countries that made other investors queasy. In Chad, Glencore lent President Idriss Déby $2 billion – equivalent to 15% of the country's GDP – in exchange for future oil supplies. The deal initially helped Déby fund military operations against jihadists, but when oil prices collapsed, Chad was forced to slash education, health, and investment spending to meet its repayment obligations to Glencore. In Kazakhstan, Vitol channeled more than $6 billion to the state oil company KazMunaiGas, becoming the largest financier of the Kazakh state. The trading house had cultivated relationships in the country for over a decade, operating through a complex network that included a joint venture majority-owned by a businessman with ties to the Kazakh president's son-in-law. Between 2011 and 2018, this partnership paid more than $1 billion in dividends to its shareholders. Perhaps nowhere did the traders funnel more dollars than in Russia. When Igor Sechin, a confidant of President Vladimir Putin, needed money to finance Rosneft's $55 billion acquisition of TNK-BP in 2013, Glencore and Vitol provided $10 billion in exchange for future oil supplies. Later, as Western sanctions restricted Russia's access to international financial markets, the traders stepped in again. In 2016, Glencore partnered with Qatar's sovereign wealth fund to buy a stake in Rosneft for $11 billion, helping Putin weather a sharp economic downturn. At a Kremlin reception, a smiling Putin awarded Glasenberg Russia's Order of Friendship. The traders insisted they were apolitical, guided solely by financial interests rather than geopolitical considerations. "We deal with the physical flow of oil up until the point where we feel it's right or allowable," explained one senior Vitol executive. "I don't think we sit back and pull out a cigar and say, let's make some history here." Yet their actions had profound political consequences, whether they intended them or not. This political influence came with growing scrutiny. Western governments began to realize that the commodity traders had become enormously important actors in global finance and politics, yet their activities remained almost entirely unregulated. As the traders channeled billions of dollars to regimes from Moscow to N'Djamena, often in direct opposition to Western policy objectives, the stage was set for an eventual reckoning with regulators determined to assert control over this shadowy corner of global finance.

Chapter 7: Regulation Reckoning: The End of Trading's Golden Age?

The phone call that almost killed Trafigura came on a summer's day in 2014. Claude Dauphin, the tireless boss of the trading house, answered to hear devastating news from his banker at BNP Paribas: the French lender was pulling about $2 billion in credit lines from Trafigura. Their relationship, forged over decades, was over. BNP Paribas had just pled guilty to violating US sanctions against Cuba, Sudan, and Iran, agreeing to pay nearly $9 billion in fines. Among the trades that had violated sanctions were loans that BNP Paribas had provided to finance Trafigura's business in Cuba. This moment marked the beginning of a new era for commodity traders. After decades of expanding their reach around the world with minimal oversight, they faced an aggressive and unpredictable policeman: the US government. Washington had discovered a powerful weapon to enforce its foreign policy – the US dollar, whose singular importance to the global banking system gave it enormous leverage. No bank could afford to be locked out of the dollar system, and so every financial institution around the world effectively became an extension of US law enforcement. For years, many commodity traders had viewed sanctions and embargoes as opportunities rather than threats. Countries under embargo had fewer choices about whom to trade with, making profits higher for those willing to do business with them. The traders operated in the most opaque corners of the international financial system, using shell companies in tax havens and ships flying flags of convenience. Even when caught breaking rules, they faced minimal consequences – Switzerland, where many traders were based, had notoriously weak enforcement of foreign bribery laws. Now, the landscape was changing dramatically. US sanctions targeted many countries where traders had done most business – including Iran, Russia, and Venezuela. Washington placed many of the traders' closest associates on sanctions lists, including Oleg Deripaska, the Russian aluminum magnate, and Dan Gertler, Glencore's partner in Congo. At Gunvor, co-founder Gennady Timchenko was sanctioned in 2014, forcing him to sell his stake to partner Torbjörn Törnqvist just before the sanctions hit. A wave of corruption investigations followed. In Brazil, prosecutors alleged that Vitol, Trafigura, and Glencore had paid a total of $31 million in bribes to employees of the state oil company Petrobras. In Switzerland, Gunvor was fined $95 million after one of its employees bribed officials in Congo and Ivory Coast. Most significantly, in July 2018, Glencore announced it had been subpoenaed by the US Department of Justice as part of a corruption and money-laundering probe covering its activities in Congo, Nigeria, and Venezuela. The UK's Serious Fraud Office and Swiss prosecutors launched their own investigations. These legal challenges coincided with structural changes in the trading business. The democratization of information eroded the traders' informational advantage, making it harder to profit from simply moving commodities around the world. The trend toward free trade and globalization began to reverse, with new tariffs and trade wars redirecting commodity flows. Climate change threatened the core of their business, with oil demand potentially peaking in the coming decade. And the traders became victims of their own success, as their enormous profits prompted clients to establish their own trading operations. China posed perhaps the greatest threat of all. Having driven the commodity boom that made the traders rich, Beijing was now building its own trading capability. Chinese state companies like Cofco, Unipec, and Zhuhai Zhenrong were handling an increasing share of China's import needs. With less need to access Western financial markets, these Chinese traders could operate in defiance of US sanctions, continuing to buy from countries like Iran when Western traders were forced to step back. Yet the commodity traders proved their resilience during the COVID-19 pandemic in 2020. As oil demand collapsed and prices briefly turned negative, they stepped in as buyers of last resort, deploying billions of dollars to purchase and store unwanted crude. It was a reminder that, despite all the challenges they faced, the traders remained essential to the functioning of global commodity markets – the merchants of power who kept the raw materials of modern life flowing even in the most turbulent times.

Summary

The rise of commodity traders represents one of the most significant yet least understood transformations in the global economy over the past century. From Theodor Weisser's pioneering Soviet oil deal in 1954 to Glencore's multibillion-dollar financing of resource-rich nations, these merchants of power have repeatedly shaped world events from the shadows. They thrived during periods of geopolitical tension – the 1970s oil crises, the collapse of the Soviet Union, and China's economic boom – by positioning themselves as essential intermediaries willing to cross political boundaries in pursuit of profit. Their story reveals how global trade actually functions beneath the surface of international relations, where pragmatic deal-making often trumps ideological considerations. The traders' future now hangs in the balance. Their traditional advantages – superior information, political connections, and regulatory arbitrage – are eroding in an age of instantaneous data, increased transparency, and aggressive US enforcement actions. Climate change threatens their core business in fossil fuels, while Chinese state-backed traders challenge their dominance. Yet their fundamental role remains unchanged: connecting resources with those who need them, regardless of political obstacles. As one veteran trader observed, "The world needs us most when things are most difficult." This suggests that while individual trading houses may rise and fall, the function they perform – bridging divides in a fractured world – will remain essential as long as nations compete for scarce natural resources.

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Javier Blas

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