December 21, 2016
A Dynamic Commodities Exclusive
The most infamous oil trader in the world was Marc Rich. Rich was trained at Philipp Brothers and left the firm after a dispute over his bonus in the mid-1970s. Marc Rich formed a firm, in his name, Marc Rich and Company which later became Glencore, the international trading giant.
Marc Rich is not only famous because of his many successes the commodities business, he became infamous when he had to leave the United States quickly after being accused of trading with Iran in oil during the hostage crisis and tax evasion. Rich lived out the rest of his days in Zug, Switzerland running what became the biggest commodities merchant company in the world. He was later pardoned by President Bill Clinton but never returned to the U.S.
Marc Rich once said that “crude oil is the blood that runs through the veins of the world.” Crude oil production occurs all over the world but there is a concentration of reserves in the Middle East. Since that is the most volatile region of the world, the price of crude oil tends to move higher when violence in that part of the world flares.
Crude oil is not only one of the most political commodities in the world, it is also the most actively traded energy commodity and when it comes to the world of raw materials trading it is the King. The price of oil reflects global economic conditions and has been a major factor in international affairs for many years. The forty-fifth President of the United States recently nominated Rex Tillerson, the Chairman and CEO of ExxonMobil, one of the world’s leading oil companies, as Secretary of State. The nomination of Mr. Tillerson is a testament to the importance of crude oil on the world political and economic scene.
Marc Rich was the King of oil trading for many decades and Glencore, the company he started, continues to be an active force in the market. Just recently, Glencore together with the Qatari sovereign wealth fund purchased a 19.5% stake in Rosneft, the largest Russian oil company. Russia is a leading world producer of crude oil and the deal will put Glencore in a position as one of the most influential marketers of oil in the world for years to come. Oil is King in the commodities market, Marc Rich was the King of oil trading and now Glencore will continue in his footsteps.
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