How FDR Charmed a Saudi King and Won U.S. Access to Oil
A secret war-time meeting. ...read more
Exxon Valdez Oil Spill
The Exxon Valdez oil spill was a manmade disaster that occurred when Exxon Valdez, an oil tanker owned by the Exxon Shipping Company, spilled 11 million gallons of crude oil into Alaska’s Prince William Sound on March 24, 1989. It was the worst oil spill in U.S. history until ...read more
Massive oil spill begins in Gulf of Mexico
April 20, 2010: An explosion and fire aboard the Deepwater Horizon oil drilling rig in the Gulf of Mexico, approximately 50 miles off the Louisiana coast, kills 11 people and triggers the largest offshore oil spill in American history. The rig had been in the final phases of ...read more
On January 10, 1901, an enormous geyser of oil exploded from a drilling site at Spindletop Hill, a mound created by an underground salt deposit located near Beaumont in Jefferson County, southeastern Texas. Reaching a height of more than 150 feet and producing close to 100,000 ...read more
John D. Rockefeller
John D. Rockefeller (1839-1937), founder of the Standard Oil Company, became one of the world’s wealthiest men and a major philanthropist. Born into modest circumstances in upstate New York, he entered the then-fledgling oil business in 1863 by investing in a Cleveland, Ohio ...read more
The 19th century was a period of great change and rapid industrialization. The iron and steel industry spawned new construction materials, the railroads connected the country and the discovery of oil provided a new source of fuel. The discovery of the Spindletop geyser in 1901 ...read more
Rare Bugatti found in British garage
On January 2, 2009, media outlets report that a rare unrestored 1937 Bugatti Type 57S Atalante Coupe has been found in the garage of a British doctor. A month later, on February 7, the car sold at a Paris auction for some $4.4 million. The black two-seater, one of just 17 57S ...read more
Gusher signals start of U.S. oil industry
On January 10, 1901, a drilling derrick at Spindletop Hill near Beaumont, Texas, produces an enormous gusher of crude oil, coating the landscape for hundreds of feet and signaling the advent of the American oil industry. The geyser was discovered at a depth of over 1,000 feet, ...read more
Oil workers drown in North Sea
A floating apartment for oil workers in the North Sea collapses, killing 123 people, on March 30, 1980.The Alexander Kielland platform housed 208 men who worked on the nearby Edda oil rig in the Ekofisk field, 235 miles east of Dundee, Scotland. Most of the Phillips Petroleum ...read more
The Exxon Valdez captain’s conviction is overturned
The Alaska court of appeals overturns the conviction of Joseph Hazelwood, the former captain of the oil tanker Exxon Valdez. Hazelwood, who was found guilty of negligence for his role in the massive oil spill in Prince William Sound in 1989, successfully argued that he was ...read more
Oil - HISTORY
Because of its desert condition there was a lot of drilling activity in Libya long before there were any suspicions of there being petroleum. The search for water involved drilling very deep wells. Back as far as 1915 deep water wells drilled by Italians sometimes found natural gas. This was of interest but natural gas was not a prime commodity at that time. In the U.S. the natural gas from oils was burnt off (flared) as a nuisance.
In 1935 a professor from Milan University who was in charge of a water well drilling program made it a point to watch for petroleum. This was probably more out of academic interest than a serious concern for finding a significant economic resource. A couple of year later petroleum was detected in a water well drilled near Tripoli.
This find was enough to prompt a geological survey in Tripolitania. One well was drilled searching for petroleum but none was found. Nevertheless in 1940 a program of exploration was initiated but the available equipment was inadequate to deal with the severe conditions of the Saharan Desert. Shortly thereafter war came to Libya and all exploration stopped.
Immediately after World War II the political status of Libya, which had been controlled by Italy, was uncertain. There was no state which could guarantee petroleum exploring companies the rights to what they might find. Therefore no exploration was carried out until after Libya became an independent kingdom in 1951. The new kingdom developed mineral rights law through consultation with the international petroleum companies. In 1953 Libya granted prospecting permits to eleven petroleum companies. Geologic surveys were undertaken by those companies. In 1955 a petroleum well was successfully drilled under desert conditions just across the border in Algeria.
The Lidyan leaders were determined to keep the market for exploratory permits in Libya rather than granting a concession to one company or a consortium of a few companies. Further more even when one company was given a concession in a particular area it would have to relinquish one quarter of the concession after five years. This was to allow the government to grant that territory to a new company in hopes that a new company might succeed where another had failed.
The conditions were that the oil companies would have to pay a 12.5 percent royalty on their revenues and a 50 percent tax on profits. The royalty and other operating expenses were of course deductible in computing the profits of the company.
Oil companies were highly interested in developing sources of petroleum in Libya because it was located on the Mediterranean Sea. Their sources from Iran were limited by a politcal crisis there in the years 1951 to 1954. The Suez Crisis of 1956-57 resulted in the closing of the Suez Canal. All petroleum from east fo Suez had to be brought around the souther tip of Africa at great additional expense. Additionally Libya was thought to have a stable, pro-Western govenment.
By 1957 there were about a dozen companies operating in Libya on about sixty different concessions. The companies operating there included the seven majors and the French para-statal Compagnie Françaaise des Pétroles. There was also Oasis, a consortium of three companies new to international petroleum exploration, Amerada Hess, Conoco and Marathon. There was also the oil company of Bunker Hunt, the son of the American oil magnate H.L. Hunt.
In 1957 Esso decided to drill in the area across the border from where the Algerian oil well had been brought in. It drilled three wells and one of them was successful. It was brought in in January of 1958 with a flow of 500 barrels per day. This was not much considering the expenses of drilling.
In 1959 Esso drilled in the Siritica region, which is the north central part of the country. It brought in a well flowing at 17,500 barrels per day. This followed by another well flowing atg 15,000 barrels per day. Later in 1959 other oil wells in Siritica were brought in. Altogether six major oil fields in Libya were discovered in 1959. Esso and Oasis were the leaders in the field.
The Wilmington Oil Field is the third largest field in the contiguous United States with an ultimate recovery estimated at three billion barrels of oil. The field is located on the 13 mile long and 3 mile wide Wilmington Anticline that extends from onshore San Pedro to offshore Seal Beach and is divided vertically by faults creating separate producing entities called Fault Blocks. Oil is produced from five major sand intervals ranging in depths from 2,000 feet to 11,000 feet where over two and one-half billion barrels of oil have been recovered. Oil and Gas are recovered through primary production, secondary water flooding, and steam flooding. A total of 6,150 wells have been drilled to date.
Oil Operating Areas
In the Wilmington Oil Field, which encompasses both tidelands and uplands properties, DOP oversees the work of two private contractors and their 300 employees. Tidelands Oil Production Company is the Field Contractor for west Wilmington. Since 1932, more than 3,400 land based wells have been drilled. In the 1950's and 1960's, water flooding was initiated to increase recovery and control subsidence.
California Resources Corporation (CRC) is the field Contractor for the Long Beach Unit (LBU), the eastern offshore portion of the Wilmington Field. THUMS Long Beach Company (named for the original Field Contractors: Texaco, Humble, Union, Mobil, and Shell) is the agent for CRC. In 1964 four man-made islands, named after the astronauts that lost their lives during the early years of the U.S. space exploration (Grissom, White, Chaffee, and Freeman), were built. Pier J was expanded into the Long Beach Harbor to develop the LBU. Approximately 1,450 wells have been drilled. The Long beach Unit began water flooding at start-up to help prevent subsidence. Today, Wilmington Field oil production is approximately 46,000 barrels per day from 1,550 active wells.
In the Uplands, the City is both a royalty participant and a working interest owner in its properties adjacent to Signal Hill and other properties throughout the City. The Signal Hill West Unit (SHWU) and Signal Hill East Unit (SHEU) is part of the Long Beach oil field located in both Long Beach and Signal Hill. The surface expressed anticline structure is visible for miles and is a local landmark next to the Long Beach airport. Signal Hill Petroleum Inc. is currently the operator of record. Recreation Park is located on the north side of 7th Street. A total of 7 wells are now operated by Breitburn Energy Company LLC, a Los Angeles based independent oil company. The City Wasem Community Lease is located near Marine Stadium, which is an extension of the Seal Beach oil field. The Marine area oil pool was discovered and developed in 1979 by Elliot & Ten Eyck (ET). The lease currently has 16 active wells.
Is my Old Oil Stock worth Anything?
Please support this research! The American Oil & Gas Historical Society’s original research and accompanying forum maintenance depend on your individual financial support . AOGHS is not affiliated with any petroleum company, advocacy groups, or industry lobbying organizations.
A petroleum stock certificate’s vignette often is an important part of its value for scripophily – the buying and selling of certificates as collectibles after they have no redeemable value as a security.
Petroleum Company Histories
Although often controversial, the history of U.S. petroleum exploration, production, and transportation should be preserved. From kerosene for lamps , gasoline for cars, and plastic polymers for everyday products , the industry’s social, economic and technological history offers a context for understanding modern energy debates.
In the rush to print stock certificates during oil booms, new companies often chose to print certificates using a vignette of derricks!
Collectors have found a surprising number of examples where quickly formed exploration companies picked the exact same oilfield scene for stock certificates. It might have saved time and money by choosing a common vignette today found on shares of Centralized Oil & Gas Company Double Standard Oil & Gas Company Evangeline Oil Company Texas Production Company Tulsa Producing and Refining Company Hecla-Wyoming Oil Company Oil Prospectors Inc. Craven Oil & Refining Buck Run Oil and Refining Home Oil & Gas Hog Creek Carruth Company Buffalo-Texas Oil Company and the Champion Oil Company.
Can you tell me anything about this old petroleum company (for free)? I found its stock certificate in an attic. Am I rich? Probably not. As shown in the companies below, since the 1850s the U.S. petroleum industry’s boom and bust cycles have left many casualties. For an example of one that actually made it to courts, see Not a Millionaire from Old Oil Stock.
America’s first oil company – the Pennsylvania Rock Oil Company of New York – organized it 1855.
Unfortunately, this small historical society cannot grant requests for free research regarding individual company histories and the potential value of stock certificates. As you may have discovered, financial research is difficult and time consuming. If you are fortunate, a visitor to this website or a society volunteer may have posted helpful information.
If your certificate is not listed here, and to share further research experiences, you are invited to submit your query in the current Stock Certificate Q&A Forum.
Below is research submitted by a leading volunteer of the American Oil & Gas Historical Society. The company histories presented often tell fascinating stories – and are exclusive of the Stock Certificate Q&A forum posts also on this website. Check back here for more of these rare histories.
Latest Research – Updated May 2021
Badger Oil & Gas Company*
Bailey Gaunce Oil & Refining Corporation*
Barrington Oil Company
Beaumont Confederated Oil & Pipe Line Company
Big Indian Oil & Development Company
Big Six Oil Company*
Black Gold Petroleum Company*
Black Hills Petroleum Company
Block Oil & Gas Syndicate*
Blue Ridge Natural Gas & Oil Corporation*
Bluebird Oil & Gas Association*
Boulder Petroleum Company
Buck Run Oil and Refining Company
Buffalo Oil Company
Buffalo-Texas Oil Company
Bug Drilling Company*
Burkburnett-Center Oil Company*
Burkburnett-Claiborne Oil Company*
Burk Imperial Oil Company*
Burk-Tex Production Company*
Busseyville Oil & Gas*
Butler Perryman Interests*
* Research in Progress
D.M. Simon Oil & Gas Company*
Dallas Oil Company of Texas*
Delaware Union Oil Company*
Delhi Oil Company
Denton-Eastland Oil Company*
Desoto Oil Company*
DeSoto Oil Company*
Detroit Oil & Refining Company*
Dominion Oil Company*
Double Standard Oil & Gas Company
Doughboy Oil Company
Dysart Oil Company
* Research in Progress
Farmers Oil & Gas Company*
Federal Consolidated Oil Company*
Federal Oil and Gas Company
Fifty-Seven Oil Company*
Fort Stockton Oil Company*
Foster Farm Oil Company
Franklin Oil & Refining Company*
* Research in Progress
Garfield Oil & Refining Company*
Gate City-Wyoming Oil & Gas Company*
Gatex Oil Company*
Galloway Oil Corporation
Gas, Oil and Developing Company (The)
General Oil Company*
General Resources Corporation*
Gin Site Oil Company*
Gladys City Oil, Gas & Manufacturing Company
Gladys Oil Company
Glenn McCarthy, Inc.
Globe Natural Gas Company*
Gold Medal Oil Company*
Golden Gate Oil Company
Golden Goose Oil and Refining Company
Golden Valley Oil & Gas Company
Good Luck Oil Company*
Goshen Oil & Gas Company*
Grand County Oil & Refining Company*
Great Basin Oil Company*
Great Oil Basin Securities*
Great Southern Oil & Refining Association*
Great Southwestern Petroleum Company*
Great Sweet Grass Oils*
Great Western Oil & Gas Company
Greater Great Falls Oil Company*
Green River Oil & Uranium Company*
Gypsy-Burke Oil Company*
* Research in Progress
Hamilton Oil & Gas Company*
Hale Petroleum Company*
Harris-Fisher Oil Company*
Havana Oil Company
Hayden-Burk Petroleum Company*
Hecla-Wyoming Oil Company*
Hesperian Petroleum Company*
Higgins Wonder Oil Company
Hiram Wilson Oil Company*
Hoffman Oil & Refining Corporation
Hog Creek Carruth Oil Company
Holiday Oil & Gas Company*
Holly Oil Company
Homa Oil & Gas Company*
Home Oil & Development Company
Home Oil Company*
Homestead Oil Company
Horse Shoe Four Leaf Mining & Oil Company*
Horseshoe-Western Oil Company
Humble Oil Ridge Company*
Huntsville Consolidated Gas Company*
* Research in Progress
Imperial Drilling Company*
Indian Oil & Gas Company*
Industrial Oil & Refining Company*
International Oil & Gas Corporation
Interstate Oil Company*
Iowa and California Oil & Gas Company*
Iowa-Beaumont Oil Company
* Research in Progress
Kantexo Oil & Gas Company*
Keck Oil Company*
Ken-Saw Petroleum Corporation*
King George Oil Company*
Kokernot Oil Company
Kutz Canon Oil & Gas Company*
* Research in Progress
La Lomita Oil Syndicate*
Lewis Oil Corporation
Lewiston-Clarkston Oil & Gas Company*
Lexa Oil Company*
Lincoln-Idaho Oil Company
Lincoln Oil Producing Company*
Liquid Gold Oil Company*
Louisiana Consolidated Petroleum Company*
Love Petroleum Company*
Loy Oil Company*
Lucky Jim Oil Company
Lucky Long Oil Company*
* Research in Progress
Mahala Oil & Gas Company*
Mary Owens Oil Company*
McKeesport Gas Company
McTon Oil Company*
Meridian Petroleum Company
Mexican Oil & Coal Company*
Mid-Central Oil & Minerals Company*
Middle States Oil Corporation
Midfields Oil Company
Mid-Texas Petroleum Company*
Minnesota-Western Oil Company
Minnesota Victoria Oil Company*
Milwaukee Electra Oil Development Company*
Mississippi Oil Company*
Monarch Vacuum Petroleum Company*
Monroe Prospect Company*
Montana-Canadian Oil Company*
Montrose Gas, Oil and Coal Company
Morris-Van Keuren Oil and Gas Syndicate
Motex Oil Company*
Mountain States Resources Corporation
Multiple Dome Oil Company*
Murdock Oil & Gas Company
Muskogee Oil & Gas Company*
Mutual Consolidated Petroleum Corporation*
Mutual Oil & Development Company*
Mutual Oil Union Company*
* Research in Progress
Nanticoke Oil Company*
National Consolidated Oil Company*
National Energy Corporation*
National Oil Company*
National Oil Company of New Jersey
National Oil Refining and Manufacturing Company*
National Petroleum Company*
National Petroleum Lease Corporation*
National Union Oil & Gas Company
New Mexico Oil Properties Association
Neilan Oil & Refining Company
New England Petroleum Company*
New England-Texas Oil Refining Syndicate
Newfield Gas & Oil Company*
North Coast Oil & Refining Company*
North Counties Oil Company
Northern Oil Company*
Northwestern Oils Inc.
Nova Petroleum Corporation
* Research in Progress
Occident Oil Company*
October Oil Company*
Ohio Oil Company (Marathon)
Ohio-Kansas Oil & Gas Company
Oil Exploration International*
Oil Prospectors Inc.
Oil Lease Development Company*
Okla-Queen Oil Company*
Oklahoma-Gulf Royalty Corporation*
Okmulgee Producing & Refining Company*
Old Colony Oil Company
Omaha Oil & Refining Company
Omaha-Lusk Oil Company*
Orange County Petroleum Company*
Oregon and Wyoming Oil & Gas Company*
Otter Creek Oil & Gas Company
Overland Oil Inc.*
Over the Top Oil Company
Owl Petroleum Company*
Ozena Oil Company*
* Research in Progress
Pacific Land and Oil*
Pacific States Oil Company*
Pacific States Petroleum Company*
Palmer Union Oil Company
Paramount Petroleum Company
Pawnee Bill Oil Company
Pelican Petroleum Company
Peoples Oil and Production Company*
Petroleum Maatschappij Salt Creek Company
Petroleum Producers’ Association
Penn Bayless Oil & Gas Company*
Penn Royal Oil Company*
Pennsylvania Oil & Development Company
Petroleum Consolidation Company*
Petroleum Production Company of America*
Phenix Oil and Gas Company*
Philippine Oil Development Company*
Phoenix Oil Company*
Pine Valley Oil Company*
Pioneer Oil & Gas Company*
Pittsburgh-Youngstown Oil & Gas Company*
Plateau Oil & Gas Company*
Plateau Petroleums Limited*
Pongratz Petroleum Company*
Postal Employees Oil & Gas Company*
Power Petroleum Trust Estate*
Powers Manufacturing Company*
Prescott-Peoria Oil Company*
Price River Petroleum Company
Producers and Refiners Corporation
Provident Oil & Refining Company*
Prudential Oil and Refining Company
Puente Crude Oil Company
Puente Oil Company
* Research in Progress
Sable Oil & Gas Company*
St. Elco Oil & Gas Company*
St. Martins Oil & Gas Company*
Sammies Oil Corporation (Choate Oil)
San Jacinto River Oil Company*
San Mateo Oil and Refining Company*
Sanger Oil & Refining Company
Santa Fe Dome Oil Company
Santa Fe Western Gas & Uranium Corporation*
Sawyer Petroleum Company
Scofield, Shurmer & Teagle*
Seaboard Oil & Gas Company
Seattle Toledo Oil Company*
Security Oil Company*
Security Oil Syndicate No. 2*
Sen-Burk Oil Company*
Seven States Oil Company*
Sherman Gasoline Company*
Shoe & Leather Petroleum Company
Shoshone Oil Company
Signal Oil and Gas Company*
Solar Oil Corporation*
Sound Cities Gas & Oil Company
Sour Lake Texas Oil Company*
Southeastern Limited Oil Company*
Southern Montana Oil Company*
Southern Rose Oil & Gas Company
Southern States Drilling Company*
Southern States Oil Company*
Corporation Southwest Oil Corporation*
Southwestern Oil Development Company
Southwestern Petroleum & Pipe Line Company*
Spear Oil Company
Square Deal Oil Company*
Standard Consolidated Oil & Land Company*
Standard Exploration Company*
Star Oil Company
Staveless Barrel & Tank Company
Steelman Realty Gas & Oil Company
Sterling Oil Company of Oklahoma*
Studebaker Oil & Refining Company*
Sulphur Oil Company*
Sunset Pacific Oil Company
Sunshine State Oil & Refining Company
Sure Oil Company*
Syndicate Oil Corporation of America*
* Research in Progress
Tapo Oil Company*
Texas-Bunger Oil and Refining Company*
Texas-Rotan Oil Company*
Texas-Washington Oil Company*
Texas Control Consolidated Oil Company*
Texas Crude Oil Company*
Texas Eastern Transmission Corporation
Texas Independent Pipe Line Company*
Texas Oil & Refining Company
Texas Oil, Gas & Mineral Products Company*
Texas Oil Products Company
Texas Producers Oil Company*
Texas Production Company
Texas United Oil Company
The 1919 Oil Company*
Tideland Oil & Gas Corporation*
Toltec Oil Company*
Trans-World Oil Company
Treasure State Oil & Gas Company
Triangle Petroleum Company*
Tri-State Drilling Company*
Tulsa Producing and Refining Company
Twentieth Century Oil & Gas Company*
Twentymile Oil & Gas Company*
* Research in Progress
Uncle Sam Oil Company*
Union Oil & Gas Company*
Union Oil, Gas & Refining Company*
United Cuban Oil Inc.
United Plains Oil Company*
United Southern Oil Company*
United States Oil and Gas Company
United Sulphur & Oil Company*
United Texas Petroleum Company*
U.S.A. Oil Company*
Ute Oil Company – Oil Shale Pioneer
* Research in Progress
Ventura Oil Development Company*
Vernon Winner Oil Company*
Volunteer Oil Company*
* Research in Progress
Wallace Oil CompanyWarren Oil & Uranium Mining Company*
Washington-Montana Oil Company*
Wellington Oil Company
Wellmington Oil Corporation*
West Coast Pipeline Company
Western Giant Oil Company*
Western Natural Gas Company*
Western Nebraska Oil Company*
Western States Oil Company*
Wichita Oil & Gas Company
Winona Oil Corporation
Wolf Butte Oil & Gas Company*
Woman’s Federal Oil Company of America
Women’s National Oil & Development Company
World Oil Company
Wyoming Chief Oil Refining Company*
Wyoming Consolidated Oil Company*
Wyoming-Dakota Oil Company
Wyoming Oil & Coal Company*
Wyoming Peerless Oil Company
Wyoming Prairie Oil & Gas Company
Wyoming Second Standard Oil Company*
* Research in Progress
Fuel Oil - History
About 1847, Pittsburgh resident Samuel Keir devised a way to distill petroleum into a lamp fuel which he called "carbon oil". The invention of the kerosene lamp in the mid 1850's led to the establishment of the first US oil company, the Pennsylvania Rock Oil Company. The American oil industry was born near Titusville in northwestern Pennsylvania in 1859. There, Edwin L. Drake drilled the first commercially successful oil well in the United States. However, the first major oil company was the Standard Oil Company founded by John D. Rockefeller in 1870. Standard Oil built its first oil refinery in Pennsylvania, then later expanded its extensive operations nationwide.
Since the first introduction of petroleum as an illuminator, and its subsequent abundance and consequent cheapness, various attenipts had been made to use it for fuel as a substitute for coal, especially for the production of steam. The advantages and drawbacks were both easily comprehended. Among the first was the smaller space it occupies, with a lesser weight, and the ease with which it can be manipulated no grates, no ashes, no raking, etc. Instead of fire-men necessary to handle the solid lumps of coal, watch its combustion, and keep the furnace in proper condition by raking the fire, cleaning the ash-pit, etc., the combustion of a liquid fuel, stuch as petroleum, may be simply managed by varying the supply by proper stop-cocks, simply an occasional observation and regulation of the supply being sufficient, bringing nearer to the great desideratum all good inventions lead to: the abolition of all hard mechanical labor by human beings, to all of whom bountiful nature has not given such an abundant amount of brains for nothing, to be wasted while doing the labor that brainless animals or machinery can perform as well, if not better.
The drawbacks of the universal use of petroleum as a fuel, were, first, the trouble and labor connected with its transportation and storage while the solid coal can be loaded in open cars and duniped into heaps, the liquid petroleum must be stored antI transported in air-tight vessels, involving far more expense and investment of capital than is incident to the transportation and storage of coal. Another drawback is its great combustibility and consequent danger connected with having it stored in quantity, while coal is perfectly safe in this respect, so safe, indeed, that a burning match, or even a burning stick or piece of wood may safely be thrown on a heap of coal and will burn up without igniting the coal, while petroleum, and even sometimes its vapors, are so combustible that it is dangerous to come near them with any flame these vapors, mixed with air, produce an explosive mixture. When once ignited, water will not extinguish petroieum, as it floats on top of it.
Thie first experiment was made about the year 1864 in one of the United States Navy Yards, either Brooklyn or Pidladelphia, where an engineer conceived the idea of placing a large number of kerosene lamps under a steam-boiler. He had observed the great heat given off by a kerosene lamp, and supposed that if only the number were large enough to fill the whole of the fire-room of a boiler furnace, they would raise steam. He overlooked the fact that the great heat produced by such a lamp does not extend farnot much beyond the chimney, and that to raise steam a long stream of burning or heated gases must be passed under the boiler and through the flues, and that only a sufficient mass of coal or other suitable material must be in a state of ignition, and the burning, aided by a draft, project a long stream of heat, which disperses itself where it is needed while lamps only moderately heat the spot under which they are directly placed. A better idea was to project a continuous spray of petroleum over pieces of brick, and have them ignited and a blast passed between them. This was tried, however with doubtful success.
The next trial was at the Battery, New York, in 1865. The inventor burned a spray of petroleum which proceeded from perforated pipes, while two blasts, one a series of small air blasts and one a series of superheated steam blasts, aided the combustion. This worked far better, as it was able to drive the flames through the return flues. Since that time several trials have been made, but most all of them accepting the same plana fine spray of petroleum and a blast of air and of superheated steam. It was soon found, however, that the steam blast, while it aided to atomize the petroleum (that is, it aided powerfully to subdivide the jet into innumerable small drops like dust), it also reduced the temperature if it was not very highly superheated, so high indeed that it volatitalized the oil when it came in contact with it. It was also found that time amount of air required for perfect combustion was enormous, not less than 50 volumes of air for 1 volume of petroleum vapor. But this is no objectiou, as air costs nothing.
In regard to metallurgy, the problem was pretty well solved polished sheet-iron and steel had been made with success and economy by means of petroleum as fuel, while for other metallurgical operations this would appear clear but what was wanted was a good steaum-boiler furnace intended to use petroleum as fuel. It was found, by trying improvements in the methods referred to, that petroleum can be used with great advantage in place of coal for the manufacture of iron, steel, glass, etc., and that even if it costs $10 a barrel and coal $5 per ton, the advantage was altogether on thh side of petroleum to the amount of 50 per cent, while under steam-boilers 1 pound of oil will evaporate very nearly 15, 16 pounds or more of water. This very favorable result is no doubt due to the fact that the combustion of coal is naturally and necessarily more wasteful, while a liquid fuel can be burned with far more economy, provided only the right method has been devised.
In regard to other rival methods, by late 1878 one was at the United States Navy Yard in Brooklyn, and showed the invention to be dreadfully out of joint, as proved by the impractical and crude ideas on which it was based. By 1880 the art of burning petroleum as fuel, so as to obtain the maximum available heat, was still in its infancy.
By 1882 one observer claimed that the Russians were considerably ahead of America in the application of petroleum as fuel. They employed it successfully upon somue of their railways for driving loconlotives, using for this purpose the crude naphtha as it comes from the wells. Most of the steamers time plied the Caspian Sea used the liquid fuel, which was very much cheaper than coal. It was consumed with the injectors, and the combustion was regulated with the greatest ease. A number of advantages were claimed for the liquid fuel. The furnaces last longer on account of the absence of sulphur there were no cinders, smoke or sparks the work of the attendammts is greatly simplified, and the heating effect of the fuel considerably greater than that of wood or coal.
The Italian navy led the way in experimenting with oil starting in 1890, and by 1900 most of its torpedo boats were oil burning. By the early 1890s it was clear that naval minds were everywhere hardening on the question of coal-endurance. By 1893 some regarded the advent of liquid fuel to be close at hand, and as ships can be fuelled (Adm. P.H. Colomb of the Royaal Navy claimed to have coined this verb) at sea with liquid fuel when it would be impossible to take in coal, the hastening of that advent was a thing to be calculated on. With coal, the experience of such ships as the HMS Amphion, with a nominal extreme speed of 17 knots and a nominal coal endurance of 11,000 miles at 10 knots, on a displacement of 4,300 tons, appeared to give more satisfaction to the naval mind as a combination than the HMS Blenheim's 21.6-knot speed with 15,000 miles coal-endurance on a displacement of 9,000 tons. An Amphion would not be justified in running away from a Blenheim, so that the extra speed was not so far called for and while the nominal 4,000 miles greater coal-endurance may be an advantage, it would seem to be much more than balanced by the displacement of the Blenheim. While, therefore, great stress must be laid on coal-endurance so long as coal is the fuel, it may be easy to overdo it in sacrificing other elements.
Oil offered many benefits compared to coal. With twice the thermal content of coal, boilers could be smaller and ships could travel further at greater speed. Oil burned with less smoke, so the location of the fleet would not be so readily compromised. Oil could be stored in tanks anywhere on the ship, allowing more efficient designs. Oil could be transferred through pipes without reliance on stokers, reducing manning. Refueling at sea was feasible, which provided greater operational flexibility. When coal fired boilers are compared with oil fired ones, the biggest differences exist in the combustion equipment. As oil can be combusted in burners of rather simple design, extensive equipment is needed in combustion of coal. In the rest of the boiler, however, there are only a few minor differences in design between boilers fired with solid fuels and those fired with oil. One major difference is that generally more combustion air is needed with solid fuels than with oil, which leads to bigger amounts of flue gases and also to a bigger boiler volume. To turn it the other way round, with a given boiler a bigger output is obtained by oil firing than by coal firing, presuming that combustion of both is possible. The US Navy had conducted significant experiments with oil as fuel almost continuously after 1864. George Wallace Melville, a graduate of Brooklyn Collegiate and Polytechnic Institute, worked in the engineering field until July 1861, when he joined the Navy in the rank of Third Assistant Engineer. In August 1887, President Grover Cleveland appointed Commodore Melville as the Navy's First Chief of the Bureau of Steam Engineering. He rapidly realized the urgent need for the establishment of a test and evaluation station where naval machinery and components could undergo examination and trial for reliability before being placed aboard Navy ships. Submitting a Congressional request for funds to establish an experiment station and test laboratory, Melville's arguments finally convinced Congress to authorize a modest $400,000 for the buildings and equipment which became the US Naval Engineering Experiment Station when it was completed in 1908.
During his administration of over 16 years, Melville superintended the design of 120 ships of the "New Navy" and introduced such widely acclaimed innovations as the water tube boiler, vertical engines, and the repair ship. Promoted to Rear Admiral (RADM) in 1899, Melville was appointed Engineer in Chief of the Navy in 1900. Melville worked to create an oil-burning fleet.
The mixed-firing method of spraying oil on coal was routine by the early 1900s. By 1900 natural gas still provided a significant amount of illumination and some heating. Coal and fuel oil provided most of the energy for heating of homes and offices in cities. Wood was still the dominant source of heat energy in rural areas.
The Royal Navy laid down [Dec 05], built [Dec 05-Oct 06], and commissioned [Dec 06] the first all big-gun battleship, HMS Dreadnought, which revolutionized naval architecture (in spite of the fact that the US Navy already had the USS South Carolina class approved in 1905, they were not laid down until December 1906, hence, the failure to complete in a timely manner gave Dreadnought the honors). This opened up a frantic naval construction race between all of the great naval powers, since all of their ships were now obsolete. HMS Dreadnought mounted 10x12-inch naval rifles in five dual barbettes, three on the center line and one on each side of the forward structure, giving her an 8-gun broadside she turned 21-knots max. with a radius of operations of 6600 miles at 10 kts and 5000 at 19 kts her power plant was a hybrid in as much as she burned both coal and oil. The transition by the Royal Navy from coal to oil was stimulated by First Lord of the Admiralty Winston Churchill and Admiral Sir John (Jacky) Fisher. The Royal Navy had already adopted oil for submarines and destroyers, as had the American Navy. When Churchill went to Whitehall in 1911, coal was still the primary source of power for naval vessels. Ordered in 1912 to outmaneuver and cross the T of the German fleet, the Queen Elizabeth-class battleships were built to burn oil only. Once this decision was made, it followed that the rest of the Royal Navy would turn to oil. This technological change was a great success, and every navy soon switched to oil. An extensive investigation of petroleum as fuel by the Liquid Fuel Board in 1902-03 proved tremendously important to the entire naval and commercial world. The Board recommended using oil as a standalone fuel in 1904. The first oil-burning American destroyer, USS Paulding, was commissioned in 1910. The BB-34 New York Class battleships, laid down in 1911, were the first US Navy battleships armed with 14-inch guns, and the last to be built with more than four main battery turrets, intermediate weight side armor and coal-fired boilers. The BB-36 Nevada Class were the last US Navy battleships to have reciprocating engines, and the last to have two propellers. At the same time they were the first of the ships to carry fourteen-inch guns, and the US Navy's first to have oil as their primary fuel. The US Navy began to establish fuel oil depots in 1910 to supply the needs of submarines and destroyers. Its first fuel oil facilities were located on the East Coast at Key West, Charleston, Norfolk, and Narragansett Bay.
Oil is a natural resource formed by the decay of organic matter over millions of years, and like many other natural resources, it can only be extracted from reserves where it already exists. The only difference between oil and every other natural resource is that oil is well and truly the lifeblood of the global economy.
The world derives over a third of its total energy production from oil, more than any other source by far. As a result, the countries that control the world’s oil reserves often have disproportionate geopolitical and economic power.
According to the BP Statistical Review of World Energy 2020, 14 countries make up 93.5% of the proven oil reserves globally. The countries on this list span five continents and control anywhere from 25.2 billion barrels of oil to 304 billion barrels of oil.
Oil and Gas Industry in AlabamaMobile Bay Gas Platforms Alabama is among the top 17 producers of oil and among the top 16 producers of natural gas in the United States. Oil and gas are found in many counties as well as in Mobile Bay. The state has developed some of the most stringent environmental regulations regarding drilling in its offshore waters. Alabama's oil production has steadily increased from an average of just over five million barrels in 2009 to nine million barrels in 2015. Alabama's natural gas production has steadily declined since 2005 but has leveled since 2012 at about 200 billion cubic feet per year. In 2015, the state the oil and gas industry contributed $11.3 billion to the Alabama economy, which was 6.4% of the state's GDP. Alabama Oil and Gas Regions Oil in Alabama generally occurs in the state's two sedimentary basins, the Interior Salt Basin in the southwest and the Black Warrior Basin in the northwest, both of which extend westward into Mississippi. Geologists use the term "basin" to describe a broad area where layered sedimentary rocks sag thousands of feet downward into a "bowl" shape, although there is often no evidence of this at the surface. The Interior Salt Basin consists of Mesozoic and Cenozoic rocks, which date back 200 million years. The Black Warrior Basin is composed of Paleozoic rocks, some of which date back 580 million years. This region is also famous for its vast coal reserves, such as the Warrior Coal Field. Oil Rig Petroleum forms in the microscopic pores of rocks such as sandstone and limestone and slowly makes its way to the surface. When the petroleum becomes trapped in its migration, it forms an oil or gas field. Common traps are geologic features known as faults and anticlines. Faults are cracks in layers of rock in which the rocks on either side of the crack move in relation to each other. This can be envisioned by thinking of a knife slicing through a layer cake and seeing one side of the cake slump downward. Anticlines are dome-shaped folds in sections of layered rock. Geologists search for these traps with machines that measure gravity, magnetic, and seismic data, all of which tell them critical properties of buried rock layers. Geologists refer to a likely place for oil or gas as a "prospect." When a prospect is identified, "landmen" are sent in to lease the mineral rights from property owners, who retain a royalty, which is a share of the revenue generated by the oil and gas produced from the owner's property. After the leases are acquired, drilling rigs are brought in to drill and test the prospect. Chesley Pruet and Dudley Hughes Knowing the geology of the state extremely well, Jones became convinced that Alabama would one day become a significant petroleum producer. He continued to lobby the legislature for laws to encourage oil men to come to Alabama with their drilling rigs. But it was not until World War II broke out in 1939 that Jones saw his wishes come true, when demand for oil rose and Alabama's fortunes changed. In 1944, Texas oilman Haroldson "H. L." Hunt drilled beside a fault in Choctaw County and discovered the Gilbertown Field in the Eutaw Sand at a depth of 3,700 feet. That field produced 15 million barrels of oil (1 barrel = 42 gallons), not a lot by modern standards but enough to make "oil fever" spread rapidly. Other companies, many of which were run by independent prospectors popularly known as "wildcatters," followed Hunt's lead, but 11 years passed before they found the next significant discovery. Early Jurassic Landscape Reconstruction As oil drilling boomed in south Alabama in the late 1960s and 1970s, wildcatter Walter Sistrunk struck gas in the Black Warrior Basin in Lamar County, as did engineer William Tucker in Fayette County. Both men, as well as Pruet and Hughes, headed small but aggressive companies called "Independents" that used investment money from various other oil industry sources. These pioneers lured many more companies, which spread natural gas development through the northwest Alabama region. Gas Rig in the Gulf of Mexico In 1978, with protections in place to preserve the bay's ecology, Mobil moved in a huge offshore rig. They drilled more than 21,000 feet into an ancient desert called the Norphlet Sandstone and discovered the largest natural gas field east of the Mississippi, the Lower Mobile Bay–Mary Ann Field. The discovery formed the core of offshore development that eventually located six trillion cubic feet of reserves and as of 2007 has sent $2.1 billion worth of royalties to Alabama's Heritage Trust Fund, which uses the interest from the funds to help pay for the state's education and infrastructure needs. The fund was the first of its kind in U.S. history. Oil and gas activity in Mobile Bay and the nearby Gulf of Mexico waters stands today as a global environmental standard for offshore drilling and production operations. Choctaw Ridge Oil Field Walter B. Jones's vision for Alabama has come true. Alabama now ranks 10th among the states in natural gas production and 15th in liquid petroleum. Since the first meager gas discovery at Hazel Green, thousands of wells have been drilled across the state. Most have produced nothing, but by 2007 the successful ones were producing nearly $2.5 billion worth of oil and gas annually, $500 million of which goes to Alabama's citizens in the form of taxes, royalties, and trusts. Alabama's several locally owned and operated companies join many others from across the nation and abroad to employ thousands of local workers in finding, extracting, refining, and transporting the state's petroleum resources.
Oil and gas is still being found in Alabama, and geologists believe new opportunities exist in the hard shales of the deep Black Warrior Basin beneath Pickens and Tuscaloosa Counties and in the thick fractured shales of St. Clair and neighboring counties.
Cockrell, Alan. Drilling Ahead: The Quest for Oil in the Deep South, 1945-2005. Oxford: University Press of Mississippi, 2005.
Today we operate in most of the world's countries and are best-known by our familiar brand names: Exxon, Esso and Mobil. We make the products that drive modern transportation, power cities, lubricate industry and provide petrochemical building blocks that lead to thousands of consumer goods.
Colonel Edwin Drake and Uncle Billy Smith drill the first successful oil well in Titusville, Pennsylvania. The colonel's discovery triggers an oil boom that parallels the gold rush of a decade earlier.
Rockefeller and his associates form the Standard Oil Company (Ohio), with combined facilities constituting the largest refining capacity of any single firm in the world. The name Standard is chosen to signify high, uniform quality.
Standard Oil Co. purchases a three-quarters interest in Vacuum Oil Company for $200,000. As a lubricants pioneer, Vacuum Oil introduces a number of popular products, including the revolutionary Gargoyle 600-W Steam Cylinder Oil.
Standard Oil lubricates Thomas Edison's first central generating system. Also in this year, Standard Oil Trust forms to include the Standard Oil Company of New Jersey (Jersey Standard) and the Standard Oil Company of New York (Socony).
The Standard Oil Trust moves its headquarters to 26 Broadway, New York City. The nine-story office building becomes a landmark. The same year, Vacuum develops Gargoyle Arctic engine oils for newly designed generators and motors that operate at speeds of up to 1,000 rpm.
The Wright brothers, Wilbur and Orville, use both Jersey Standard fuel and Mobiloil (Vacuum) lubricants for their historic first flight at Kitty Hawk, North Carolina.
Socony gains a strong foothold in the vast market for kerosene in China by developing small lamps that burned kerosene efficiently. The lamps become known as Mei-Foo, from the Chinese symbols for Socony, meaning "beautiful confidence."
Following a landmark U.S. Supreme Court decision, Standard Oil breaks up into 34 unrelated companies, including Jersey Standard, Socony and Vacuum Oil. The year also marks the first time Jersey Standard's sales of kerosene are surpassed by gasoline, a product that in the early days had often been discarded as a nuisance.
Ralph De Palma, winner of the Indianapolis 500, is the first of many Indy winners to use Mobil products. His average speed: 89.84 mph.
Jersey Standard acquires a 50-percent interest in Humble Oil & Refining Company of Texas. It was during this year that Humble, led by its pioneering Chief Geologist Wallace Pratt, employed micropaleontology, the study of microscopic fossils contained in cuttings and core samples from drilling, as an aid in finding oil.
Jersey Standard researchers produce rubbing alcohol, or isopropyl alcohol &mdash the first commercial petrochemical.
Embodying the phonetic rendition of the initials &lsquoS&rsquo and &lsquoO&rsquo in Standard Oil, Jersey Standard brings out a new blend of fuel under the trade name Esso.
Humble geophysicists use a refraction seismograph and discover an oil field in Sugarland, Texas.
Amelia Earhart uses Mobiloil to protect Friendship when she makes her historic solo flight across the Atlantic. The previous year, Charles Lindbergh used Mobiloil in the Spirit of St. Louis on the first solo flight across the Atlantic.
First commercial unit in a cat-cracking refinery begins operation at Socony-Vacuum&rsquos Paulsboro, New Jersey, refinery. The unit used a process developed by French scientist Eugene P. Houdry with the financial backing of Socony-Vacuum. The process added a clay-like catalyst to the cracking process to boost gasoline yields and octane rating.
Harlem postman Victor Green creates the Green Book. Often referred to as the &ldquoBible of Black travel,&rdquo the Green Book listed service stations, hotels, restaurants and other establishments where Black travelers would be welcomed. Jersey Standard was the only major retail distributor of the Green Book through its network of Esso service stations, which welcomed Black motorists and also provided business opportunities for Black franchisees. The Green Book was published and distributed nationwide until 1967.
Jersey Standard researchers produce an artificial rubber, butyl. Today, butyl is used in the creation of tires, surgical tapes, protective coatings and more.
The world's first commercial production of alkylate begins at a Humble plant in Baytown, Texas. Alkylation made possible the manufacturing of iso-octane, used as a blending agent to produce 100-octane aviation gasoline.
The world&rsquos first fluid catalytic cracker goes onstream at Louisiana Standard&rsquos Baton Rouge refinery. The process, developed by four Jersey Standard researchers known as the &ldquofour horsemen,&rdquo improved on the Houdry method for cat cracking and eventually became the industry standard for producing gasoline. Fortune magazine called it &ldquothe most revolutionary chemical-engineering achievement of the last 50 years.&rdquo
Jersey Standard introduces Uniflo motor oil, the first multigrade motor oil recommended for both summer and winter use.
Jersey Standard establishes the Esso Education Foundation, a program that gives financial aid to private colleges and universities.
Pan American Airways flies its first trans-Atlantic Boeing 707 flight from New York to London. The flight is fueled by Mobil aviation fuel.
An advertising copywriter in Chicago comes up with the advertising slogan &ldquoPut a tiger in your tank.&rdquo
Humble invents 3-D seismic technology, a revolution that completely changes the way the industry searches for oil and gas resources. (This breakthrough technology, coupled with the use of massive parallel computers in seismic imaging, has helped our geologists sharply reduce finding costs since the 1980s while increasing new field resource additions.)
Mobil celebrates 100 years since the founding of the Vacuum Oil Company in 1866 and changes its name to Mobil Oil Corporation. The company launches a wide-reaching identity program to emphasize the Mobil trade name.
Jersey Standard officially changes its name to Exxon Corporation. The name change is approved by Jersey Standard shareholders in a special shareholders&rsquo meeting.
Mobil introduces a synthetic automotive engine lubricant &mdash Mobil 1. Today, Mobil 1 is the world&rsquos leading synthetic motor oil.
Mobil participates in completion of Beryl A, the world's first concrete production platform. The 50-story-high structure was the prototype for other concrete deepwater facilities operating in the North Sea.
Mobil invents a process for converting methanol into high-octane gasoline through the use of the company&rsquos versatile ZSM-5 catalyst.
Exxon opens its own facility for environmental health research at East Millstone, New Jersey. Exxon Biomedical Sciences, Inc. conducts research to further assure the safety of Exxon operations and products.
Exxon celebrates 100 years since the formation of the Standard Oil Trust in 1882. In its first 100 years, the company evolved from a domestic refiner and distributor of kerosene to a large multinational corporation, involved at every level of oil and gas exploration, production, refining and marketing, and petrochemicals manufacturing.
Exxon Research and Engineering invents a powerful new imaging technique called 3-D microtomography to study the internal structure of opaque objects without damaging them.
On March 24, 1989, the tanker Exxon Valdez runs aground in Prince William Sound in Alaska. The Valdez oil spill was a tragic accident that ExxonMobil deeply regrets. The company took immediate responsibility for the spill, cleaned it up and voluntarily compensated those who claimed direct damages. Learn more about the Exxon Valdez.
Exxon introduces Exxpol, a single-site metallocene catalyst used to produce consistent, controllable molecular structures that make plastic and rubber products tougher and impact-resistant, with less haze and with excellent organoleptics (low off-taste and odor).
Exxon establishes the Save The Tiger Fund in partnership with the National Fish and Wildlife Foundation. The Save The Tiger Fund is dedicated to supporting the conservation of Asia&rsquos remaining wild tigers. Since its establishment, ExxonMobil has provided $1 million annually in support of the Save The Tiger Fund.
Mobil introduces Speedpass, an electronic system which automatically activates the pump and charges purchases to a credit card. Speedpass is similar to the electronic toll technology successfully used on subway, bus and highway systems around the world.
On November 30, 1999, Exxon and Mobil join to form Exxon Mobil Corporation. &ldquoThis merger will enhance our ability to be an effective global competitor in a volatile world economy and in an industry that is more and more competitive,&rdquo said Lee Raymond and Lou Noto, chairmen and chief executive officers of Exxon and Mobil, respectively.
ExxonMobil Research & Engineering Company (EMRE) develops the SCANfining process, which uses a new proprietary catalyst to selectively remove more than 95 percent of the sulfur from gasoline while minimizing octane loss.
ExxonMobil, joined by other sponsors, initiates the Global Climate and Energy Project (GCEP) at Stanford University &mdash a pioneering research effort to identify technologies that can meet energy demand with dramatically lower greenhouse gas emissions.
ExxonMobil partners with professional golfer Phil Mickelson and his wife, Amy, to launch the Mickelson ExxonMobil Teachers Academy. The academy is designed to provide third- through fifth-grade teachers with the knowledge and skills necessary to motivate kids to pursue careers in science and math.
ExxonMobil and Qatar Petroleum, with other joint-venture partners, expand development of the giant North Field offshore Qatar, the largest nonassociated gas field in the world.
Exxon Neftegas Limited (a subsidiary of Exxon Mobil Corporation) completes the drilling of the Z-11 well, the longest measured depth extended-reach drilling (ERD) well in the world. (Located on Sakhalin Island offshore eastern Russia, the record-setting Z-11 achieved a total measured depth of 37,016 feet [11,282 meters], or more than seven miles.)
ExxonMobil's donation through &ldquoIdol Gives Back&rdquo enables the distribution of hundreds of thousands of bed nets throughout disease-stricken communities in Angola.
Exxon Mobil Corporation (NYSE:XOM) and Synthetic Genomics Inc. (SGI) announced the opening of a greenhouse facility enabling the next level of research and testing in their algae biofuels program. In 2017, these efforts will yield a breakthrough involving modification of an algae strain that more than doubles its oil content without significantly inhibiting the strain&rsquos growth.
ExxonMobil finalizes its agreement with XTO Energy Inc., creating a new organization to focus on global development and production of unconventional resources. A plan to build and deploy a rapid response system that will be available to capture and contain oil in the event of a potential future underwater well blowout in the deep-water Gulf of Mexico is announced by Chevron, ConocoPhillips, ExxonMobil and Shell. ExxonMobil leads the containment system efforts on behalf of the sponsor companies.
Exxon Mobil Corporation announced two major oil discoveries and a gas discovery in the deep-water Gulf of Mexico after drilling the company's first post-moratorium deep-water exploration well. This is one of the largest discoveries in the Gulf of Mexico in the last decade.
The Complete History Of Oil Markets
Like most other commodities in the markets, crude oil prices have routinely experienced wild price swings alternating between times of great shortages, high demand and high prices and periods of oversupply, low demand and depressed prices. These so-called crude oil &ldquoPrice Cycles&rdquo tend to last several years, depending on variables such as oil demand, volume of oil drilled, processed and sold by the major producers.
Since the early days of commercial production in Baku, Azerbaijan, these price swings have been triggered by economic and political events, technological advancements and changes within the petroleum industry, and continue to influence prices in the present day.
Crude Oil Price History: 1861-Present
Source: IG Group
1800-1869: Early black gold rush
The modern oil industry traces back its roots to Baku where the first commercial refinery was established in 1837 to distil oil into paraffin for heating and lighting purposes.
The first modern oil well was sunk in Baku in 1846 and reached a depth of 21 meters. The single oil field accounted for more than 90% of global production, with most of the oil finding its way to Persia (present-day Iran).
Several commercial oil wells soon followed:
Pennsylvania was the epicenter of the first black gold rush, producing nearly 50% of the world&rsquos oil. Prices shot up rapidly from .49 per barrel in 1861 to $6.59 a barrel in 1865, representing a massive 1,245% climb in the space of just four years.
1870-1913: The auto revolution
Whereas some economists contend that the modern oil industry only took off after WWII with the creation of the Marshall Plan - part of which was an agreement for a Free On Board price for all players - others argue that the incorporation of Standard Oil Co by John D. Rockefeller in 1870 in Ohio was the true launchpad for the industry. Related: EIA Sharply Cuts Oil Price Forecast
Standard Oil quickly rose to prominence over the next two decades, driving down prices and buying up the competition. The company was so successful that it controlled nearly 90% of refined oil in the United States by 1890. As production continued to expand both in the US and in Russia, global oil prices fell from an average of $2.56 a barrel in 1876 to just .56 in 1892. This was further accelerated with the launch of the first commercial cars in Germany and the US in 1896, a technological revolution that would fuel unprecedented growth for the industry.
1901-1911: Rise of the oil majors
Many of the modern oil majors can trace their origins to the early 20th century.
- The discovery of oil at Spindletop, Texas, led to the creation of Texaco and Gulf Oil in 1901
- Increasing competitive pressure led to Shell and Royal Dutch merging in 1907 to form Royal Dutch/Shell
- BP, formerly known as the Anglo-Persian Oil Company, was incorporated in 1908 following the discovery of oil in Iran
- Chevron, Exxon and Mobil (now Exxon Mobil) came into being in 1911 after the split of Standard Oil Co following an antitrust ruling by the US Supreme Court
The seven oil majors went on to control 85% of the world&rsquos oil reserves during their golden years in the 1970s.
1914-1949: Oil discoveries, wars, crises
The discovery of oil in Cushing, Oklahoma, in 1912 is considered an important milestone for the US oil industry because the region grew to become one of the most important oil fields in the country. Notably, it also became the settlement point for the West Texas Intermediate (WTI) oil price, a leading global oil price benchmark.
The next four and a half decades were a turbulent period marked by a series of major wars and economic crises, all of which would have an important bearing on oil prices.
First was WWI (1914-1918) which drove up global demand for oil that more than doubled oil prices from .81 per barrel in 1914 to $1.98 by the end of the war. Demand continued to grow even after the war ended mainly fueled by the ever-increasing popularity of the automobile and a gasoline shortage in the US west coast. At first, prices surged to $3.07 per barrel before retreating and stabilizing around $1.61 as production increased.
Around this time, oil companies started researching other applications for the commodity including commercial production of plastics. However, prices remained relatively low despite the extra demand created by these applications mainly due to a combination of stiff competition and plentiful supply. Meanwhile, major oil discoveries elsewhere continued to keep the markets awash with the commodity including Venezuela, Iraq, the USSR, Kuwait, Saudi Arabia and the Gulf of Mexico.
The discovery of oil in East Texas in 1930 was one of the major highlights of this period because it helped create an oil glut that happened to coincide with the Great Depression that consequently depressed prices from $1.19 in 1930 to .65 in 1931. It took the intervention of the Texas Railroad Commission which enforced production quotas to stabilize prices and prevent further declines.
Just like WWI, the beginning of WWII in 1939 also helped drive demand and goose prices. However, the effect was less pronounced this time around due to bountiful global supply. Nevertheless, the war made governments acutely aware of the need to control reserves, and it would clearly show in their actions over the next couple of decades.
1950-2003: Battle to control production
The ending of the second world war would usher in a period whereby many countries made concerted efforts to hold sway in global oil production, with several governments nationalizing their oil infrastructure.
Between 1950 and1960, Iran, Indonesia and Saudi Arabia all partly nationalized their oil industries. The Suez crisis of 1956-57 saw Egypt seize the Suez Canal through which nearly five percent of the world&rsquos oil flowed.
However, it was the US and USSR that would emerge as the biggest heavyweights in terms of production control. In the late 1950s, the USSR started to flood the market with cheap oil leading to price cuts by the majors in a bid to remain competitive. In response to these developments, Saudi Arabia, Iran, Iraq, Kuwait and Venezuela teamed up and formed OPEC as a means to lower competition between their countries and also as a means to have a bigger impact in controlling supply.
OPEC went on to expand its membership over the next two decades with UAE, Libya, Indonesia, Qatar, Nigeria, Algeria, Gabon and Ecuador joining the organization. Between 1960 and 1976, most of these countries took control of their oil reserves by buying out or forcibly taking shares from the oil majors.
The US and the USSR continued to throw their weight around but soon the influence shifted to OPEC. In 1973, OPEC members embargoed countries supporting Israel in the Yom Kippur war. Consequently, oil prices shot up to levels never witnessed before, from $2.48 per barrel in 1972 to $11.58 by 1974 and even higher in parts of the US. Related: Is The U.S. Gas Boom Already Over?
It was around this time when oil was discovered in the North Sea in a region controlled by the UK and Norway. Oil from this area is referred to as Brent crude and is used alongside WTI to benchmark prices.
Iran sharply cut production during the Iranian revolution (1970-1980) and also during the Iran-Iraq war of 1980-1988 leading to a spike in prices to $36.83. However, prices fell again due to demand shocks as well as increased production by the USSR, which became the world&rsquos largest producer in 1988. Iraq invaded Kuwait in 1990, leading to the Gulf War. This created a major supply shock that led to prices shooting up from $14.98 per barrel before the war to $41.00 in September 1991.
The 1990s witnessed wild price fluctuations. The Soviet Union fell in 1991, precipitating the collapse of the Russian oil sector with production halving over the next decade mainly due to reduced investments. However, global demand also tumbled in 1997 due to the Asian financial crisis but managed to recover by the turn of the century after the region&rsquos economic outlook improved.
2003-Present: Hydraulic fracturing and a changing landscape
This next decade witnessed some of the most spectacular explosions in oil prices.
The US invaded Iraq in 2003 leading to supply uncertainties. This was further compounded by massive demand growth by Asia and China. Consequently, prices jumped from $28.38 per barrel in July 2000 to $146.02 in July 2008.
From here prices fell due to the global financial crisis of 2008 before staging a comeback. The Arab Spring of 2011 created supply shortages and helped push prices to $126.48 per barrel.
Technological advancements in recent times have significantly altered the global oil landscape. Hydraulic fracturing has pushed the US to the top of the pack once again, reducing the influence of OPEC and depressing prices. Flooding of the market by US shale has led to a sharp drop in global oil prices, from $114.84 per barrel in June 2014 to $28.47 in January 2016. OPEC has tried to ameliorate the glut by teaming up with non-OPEC countries such as Russia to implement production cuts. Consequently, prices have recovered somewhat but have never approached levels seen in the past decade.
With the US now acting as the new &lsquoswing producer&rsquo OPEC&rsquos influence and ability to control prices is likely to remain diminished. The unresolved trade war between the US and China as well as geopolitical uncertainty in Iran, Syria and other countries has helped goose prices from their 2016 lows of below $30 per barrel to $54.70 in October 2019. But with continued high levels of shale production and a weakening global economy, prices are expected to remain subdued with prices projected to average $66 a barrel in 2019 and $65 a barrel in 2020.