1. Overview of the Global Physical Commodities

Rembert the “Barter”: exchanging a commodity for another commodity before the development of what we call “Money”.

This is called “Vertical integration” in which one company owns the whole supply chain and controlling the market by owning almost 100% of the market share. For instance, only one energy company was operating in the economy for generating electricity, transmission, and the final distribution.

These are characteristics of a completive market where products are identical, however, in terms of the number of market participants, some global commodity businesses are controlled by few multinational corporations.

Copper ores (the basic raw material of copper) contain about 0.5–4%, then in most of the cases, copper ores are processed into concentrates in the mine to save process and transportation costs. The concentrate is a finely milled, dark gray material containing about 30% copper (Cu), 30% iron (Fe), and 30% sulfur (S). The concentrate also often contains small amounts of precious metals and a range of other elements, which are processed in the smelters.

Shale oil refers to hydrocarbons that are trapped in formations of shale rock. Shale oil is closer to a finished product than oil shale, but it’s still an involved process that involves drilling and fracking. It is an unconventional oil produced from oil shale rock fragments by pyrolysis, hydrogenation, or thermal dissolution. Shale oil was one of the first sources of mineral oil used by humans, its was used by Arabs in the tenth century, then in Europe and the US from the fourteenth to the twentieth centuries. When the conventional oil was discovered in economics quantities, shale oil was abandoned for the high production cost, some countries used it again the 1970s during the Arabic nations’ embargo on oil exports, then was abandoned again until the beginning of the twenty-first century when the US developed technologies to extract shale oil at lower and competitive cost.

Standard Oil Company of New Jersey, Standard Oil company of New York, Standard Oil of California, Texaco, Royal Dutch Shell, Anglo-Persian Oil Company, Gulf Oil.

This happened to Kuwait and Saudi Arabia when they built their budgets at high oil price in 2014 then oil prices suffered huge losses. The same in 2020 when Saudi Arabia built the budget at $80/barrel while the price dropped to $24/barrel leading Saudi Arabia in thinking to cut subsidies or increase taxes.