From traders to tankers: who makes a mint out of $70-barrel oil
This week petrol prices broke new records in Britain and the US, creating political fallout for President Bush and pushing UK fuel towards £1 a litre. But who is getting rich? We offer a dollar-by-dollar guide to a $2.4trillion global oil industry
Saturday April 29, 2006
The Guardian
Oil production Oil companies Companies such as make the bulk of their money from the “upstream” business: the exploration and production of oil. BP reported earlier this week that it had earned $6.8bn upstream out of a total profit of $8.5bn in the three months to March 31.
Saudi Arabia is the biggest oil exporter in the world and rising oil prices have swollen government coffers. Exploiting oil is relatively cheap in Saudi – less than $3 for a $70 per barrel price, and it's all controlled by the state. Last year the country made $133.5bn out of oil and spent $74.8bn on things like education ($18.7bn) and health ($7.2bn), according to figures from the Centre for Global Energy Studies. It also spent on defence: $38.5bn, some of which goes to Britain to pay for BAE systems jets. Some of the $57.1bn surplus in 2005 went to pay off the enormous Gulf War One debt Saudi ran up. The rest? US Treasury bonds and other capital markets including shares of UK stock-listed companies. The princes take personal commissions on big trade deals and their money – estimated in total at $1trillion – is invested in all sorts of assets including London property. Dubai, like other members of the UAE, has put its money into becoming a centre of finance, trade and tourism. Dubai Ports World recently bought one of Britain's best-known companies, P&O.
Nigeria has become the first African nation to pay off its outstanding debts using oil revenues: it paid $4.5bn to Paris Club creditors last week. In Nigeria, private oil companies such as Shell pay for the cost of finding oil and then pay a royalty tax to the government. Venezuela is using its newfound wealth in quite different ways.
Hugo Chavez, the left-wing president of
Venezuela, is promoting a massive new social reform programme. He is also selling oil at knock-down rates to Latin American neighbours in a bid to separate them from
Washington's political orbit.
$5.9 billion, Value of oil produced globally in a day
Transportation
Massive demand for oil around the world has helped fuel the biggest shipping boom in history. Noone has yet secured the recognition of the former maritime magnates such as Onassis and Niarchos but Greeks – and Norwegians – still control the bulk of the world's tankers. The new figures of Greek shipping are men such as Loucas Haji-Iaonnou (father of easyJet founder Stelios), plus the Angelicoussis and Livanos families. Norwegian shipowner John Fredriksen is probably the nearest thing nowadays to Aristotle Onassis but he favours a low profile and is not someone who likes to be seen at society gatherings. Fredriksen has been spending some of his millions in Britain – he did once own London's most expensive property in Chelsea. Shipowners like the usual millionaire baubles such as fast cars, yachts and Impressionist paintings.But many love shipping and historically pile much of their money into even more vessels, fuelling over-capacity and bringing boom cycles to the inevitable bust. Overordering is happening right now. Owners – including and the other oil companies – can make $6m on one cargo carried on a typical longhaul journey from Saudi Arabia to the US east coast. The price of vessels has shot up due to heavy demand and it can cost up to $140m now to build a new one. A typical supertanker can carry 2m barrels of oil and at $70 per barrel this means a ship is moving a cargo worth $140m. Big insurance premiums have to be paid to cover the ships and cargos meaning large revenues for Lloyd's of London.
$84 million, Daily cost of oil transportation
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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