Bill Rancic Defends His Wife Giuliana After Fashion Police Controversy: 'I Tried to Get Them to Release the Footage' 42 years, 2,191 covers and 55,436 stories from PEOPLE magazine's history for you to enjoy
- Man Who Kidnapped and Repeatedly Raped 14-Year-Old Girl Over 9-Month Period Pleads Guilty and Faces 90 Years in Prison
- Read the Cover Story: Steve Harvey: From Homeless to Having It All
- The 8 Most Glorious Moments from the Scripps National Spelling Bee
- Rum Diary Flashback: Where Johnny Depp and Amber Heard First Met
- What Happens Without a Prenup? Divorce Lawyers Weigh In on Johnny Depp and Amber Heard's 15-Month Marriage
On Newsstands Now
- Matthew McConaughey: In His Own Words
- Jessa Duggar's Wedding Album
- Brittany Maynard's Final Days
Pick up your copy on newsstands
Click here for instant access to the Digital Magazine
People Top 5
LAST UPDATE: Tuesday February 10, 2015 01:10PM EST
PEOPLE Top 5 are the most-viewed stories on the site over the past three days, updated every 60 minutes
- January 14, 1980
- Vol. 13
- No. 2
Portrait of An Oil Gambler: Rafael Tudela Wins Millions in the Notorious Spot Market
At the expense of much of the industrialized world, Tudela also applies the chess master's gifts of cunning, foresight and opportunism to the shadowy, high-stakes game of the spot-oil trader. The 47-year-old petroleum engineer is one of the little-known speculators who operate in the widening commercial gap between the greed of those who produce the world's oil and the desperation of those who must have it, at whatever price. Tudela has no apologies for his profession. "You have to be pragmatic in business and follow the rules established in the world," he says blandly. "It is perfectly legitimate to buy and sell oil that is available."
As suppliers of last resort to private and public consumers, middlemen like Tudela can afford to pay more than OPEC's fixed rates per barrel (now between $24 and $30)—and demand double those rates and up. Spot-oil traders are subject to uncertainty in price and supply, of course, but their success works to feed that uncertainty. At last month's conference in Caracas, OPEC's failure to agree on a uniform price increase was laid in part to the sky-high price of spot oil (as much as $50 per barrel). Some OPEC nations like Iraq have begun to renege on long-term contracts in order to cash in with the middlemen. Result: The spot market, once confined to small refineries and other consumers without long-term fixed-rate contracts, has become an important source of oil for the world's major customers, including the U.S. government.
Working their deals by telephone and telex out of one-room offices all over the world, spot traders now handle 10 to 15 percent of all the oil transactions in the world—a 400 percent increase over the past few years. The boom invites exploitation. As one broker puts it: "With a little luck, you can turn the oil crisis into a winning ticket for the million-dollar lottery." (Tudela's own country, Venezuela, sells only by long-term contract, never on the spot market.)
Tudela is a grand strategist of the spot-oil game, and it has made him very rich. "A lot depends on psychology," he says. "I use what I call 'the nose.' " Scenting the Shah's downfall and a consequent drop in supply early last year, for example, Tudela gambled $5 million on a shipload of Ecuadorian crude, at $16.30 a barrel—the highest price ever paid at that time. A few days later the Shah fell and Tudela found a worried U.S. customer willing to buy at $20 a barrel. The Venezuelan trader's profit for a few days on the telephone: $1.1 million. "The real secret is the people you know and the reputation you have," says Tudela, who recently returned from a pheasant hunt with oil company presidents in Europe. "Many people say they have oil and don't have it. When you perform, you're in the club. Once a man doesn't perform, he's out of the club."
With a single exception—a contract with the U.S. Department of Energy for 1.8 million barrels that fell through when the Libyan supplier reneged—Tudela has performed flawlessly. After 10 years in operation, his Hideca Trading Co. posted $450 million in 1978 sales, 80 percent of that from the spot-oil market. Tudela owns three supertankers, operates 10 oil fields in the U.S. alone and is about to move into the refining business. He also heads a conglomerate of 33 companies (with 2,000 employees) ranging from publishing to chemicals to real estate. His annual salary runs high into seven figures. His personal fortune is vast.
It has been a heady rise for the son of Spanish émigrés who came to Venezuela with nothing but a fine name. Tudela's father, a Spanish aristocrat, was disinherited for marrying an industrialist's daughter. Although he managed finally to open his own hat shop, he gambled his money away. When his father died in 1956, Rafael had to borrow $100 to pay for the funeral. Educated at the Central Venezuelan University and the University of Houston, the son began his career by working for Exxon, then took on the challenge of reviving a bankrupt auto-glass factory in Venezuela. Succeeding, Tudela moved on to what he calls "my first love—oil and ships."
At the age of 34 he closed his first oil deal, a series of complex negotiations that made his reputation as an international entrepreneur. It began when he learned that Argentina was trying to buy $17 million of butane gas and that it had surplus frozen beef to unload. He knew that in Spain, a major customer for Argentine beef, shipyard workers were being laid off. Although Spain wasn't eager to buy more meat, Tudela approached the Spanish authorities with an attractive offer: He would order a 100,000-ton Spanish tanker if they would accept $11 million of frozen beef as payment. Spain agreed, and Argentina awarded Tudela the butane contract. Once he had that commitment, Tudela had no trouble obtaining a loan to buy the gas. When the nine-month deal was concluded, he had earned a $2 million profit. "We always try to add an additional ingredient, to provide a service to the customer, to solve a political or financial problem," explains Tudela. "And we don't do business with people we don't like."
Tudela's nose tells him the spot-oil boom is peaking. "Unless some other political crisis happens," he says, "spot-market prices should drop considerably late in the first quarter of this year." Oil stockpiles are high now, he explains, because production is rising and consumption has decreased slightly, due in part to a warm winter. Falling prices, Tudela insists, would not displease him. "Oil is a resource of humanity," he says. "It should be controlled for the use of countries and peoples, and not for speculation, really."
That statesmanlike posture is not entirely out of character. A Venezuelan congressman for the past 11 years, Tudela serves as an emissary on trade missions to the Spanish government and heads the legislature's permanent Commission on the Economy. "My votes go against my interests," he says, and so it seems. Four years ago, as a member of the presidential commission which nationalized the oil industry, he helped the government take over his own company, Talon Petroleum, which was producing 4,000 barrels of crude oil a day. By that time, however, Tudela's fortune and reputation were secure, and they certainly will not be threatened by a slump in the spot-oil market. Currently, among other projects, he is trying to work a barter deal in which China would pay for Peruvian iron ore with rice and oil.
His skills as a negotiator are meeting their severest test, however, in his attempt to bring world chess champion Anatoly Karpov and ex-champ Bobby Fischer together. One of Fischer's conditions is that Tudela, who is president of the Chess Federation of the Americas, act as umpire. Fischer's confidence does not seem misplaced. Last year Tudela served as a judge in the Miss Venezuela beauty pageant. As he pinned the winner's banner on Maritza Sayalero, he recalls, "She said I brought her a lot of luck." Those who doubt Tudela's golden touch should take note: Maritza Sayalero is now Miss Universe.
Treat Yourself! 4 Preview Issues
The most buzzed about stars this minute!