The World For Sale
Javier Blas        

Summary

The history of commodity traders, some of the most interesting and private humans on the planet

Rating: 4/5

Notes

Underpinning almost all of our consumption is trade of natural resources and underpinning that trade are commodity traders

Glencore is the largest metals trader, top 3 oil trader and world’s largest wheat trader and public

Leading Oil trader is Vitol, who are closely tied to the British political establishment

In agriculture, Cargill is king

4 big developments shapred the global economy for traders: oil opening up in the Middle east, collapse of the Soviet Union in ‘91, rise of China and financialization of the economy in the 80s

Bribery was rampant in the industry

The focus of personal connection became an obsession of the industry, even with the email and Zoom world

The culture of all trading houses is that of hard work, loyalty and partnership

After OPEC’s creation in the 60s and 70s, commodity traders became essential to move their product which also made them more powerful

Marc Rich became the most important oil trader in the world

The Suez canal is massive for global oil to get oil from the Middle East to US/EU

After the Yom Kippur War in ‘75, oil became the most important commodity for the world’s health

The centre of the oil market shifted from boardrooms in London and NYC to Rotterdam

Decades of global economic growth spurred massive investments in commodity production around the world

Resource multinationalism swept the world in the 70s and 80s

Marc Rich and Co saved Jamaica in the 80s by bailing them out in exchange for access to bauxite for aluminum

The oil traders helped prolong the apartheid by supplying South Africa with oil even after sanctions were placed on them

The Gulf Ear was another major oil shock in 90/91 where futures/options led the way

The soviet collapse was a seismic event for commodity traders as they were one of the largest producers of oil, metals and grain

The commodity traders were connecting the old communists with banks in London and NYC

China’s rise was a massive boom to the commodity traders in the 2000s

The amount of commodities a country consumes is based on the number of people in their country and income, usually after a per capitre increase of $4000

Glencore is the world’s largest shipper of coal in 2000 owning a lot of plants

There was a massive commodity supercycle in the 2000s, primarily due to China

2 big oil trading companies of the 2000s were Meruria and Guvnor

Glencore owns a lot of African natural resources through mines

Congo is very rich in resources like uranium, copper and cobalt

By 2008, all the best information was in the hands of the commodity traders

From their comfortable offices, commodity traders are shaping geopolitics and history around the world

Trading companies became so big they had the power to finance nations. They were no longer just traders of commodities but merchants of power

The case against BNP Paribas and Trifigura with a 9B fine showed the US government’s willingness to punish those who are against their foreign policy interests and its main weapon is the US dollar

Challenges to the business include less preferred access to info, deglobalization and climate change

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