Verisoph story dossier
The commodity that remade the twentieth century: Drake's 1859 well, Rockefeller's Standard Oil and its 1911 breakup; the majors and the Middle East, Anglo-Persian, Aramco, and the Seven Sisters; the producers' revolt, Mossadegh, OPEC, and the 1973 embargo...
The commodity that remade the twentieth century: Drake's 1859 well, Rockefeller's Standard Oil and its 1911 breakup; the majors and the Middle East, Anglo-Persian, Aramco, and the Seven Sisters; the producers' revolt, Mossadegh, OPEC, and the 1973 embargo; and oil as power, the petrodollar and the Gulf wars.
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Edwin Drake strikes oil at 69 feet using a steam engine and driven pipe, proving that petroleum could be pumped from the ground on purpose. The well set off a drilling rush in western Pennsylvania and marked the birth of the modern oil industry.
Refiners learned to distill cheap kerosene from crude oil for lamp fuel, undercutting expensive whale oil almost overnight. Lighting, not fuel for engines, was the first mass market that made oil valuable and drove the early industry.
John D. Rockefeller incorporates the Standard Oil Company of Ohio and begins buying out rivals refinery by refinery. Through secret railroad rebates and ruthless pricing, he set out to control the entire refining business.
Standard Oil binds its many companies into a single trust that controls roughly 90 percent of US refining. It became the model for the American monopoly and the target of a generation of reformers.
The Lucas gusher at Spindletop blows out at an unheard-of rate, flooding Texas with crude and new companies like Gulf and Texaco. Cheap, abundant oil now made fuel, not just lamp kerosene, the industry's future.
British investor William Knox D'Arcy buys a 60-year concession over most of Persia's oil for a small sum and a share of future profits. It was the first great oil concession in the Middle East and the seed of what became BP.
Journalist Ida Tarbell publishes The History of the Standard Oil Company, documenting the rebates and coercion behind Rockefeller's empire. The muckraking exposé turned public opinion against the trust and helped build the case for breaking it up.
After years of failure, D'Arcy's drillers hit oil in southwest Persia, the first major find in the Middle East. The Anglo-Persian Oil Company was formed the next year to exploit it, later renamed Anglo-Iranian and then BP.
also in The Rockefellers
On 15 May 1911 the United States Supreme Court ruled that Standard Oil was an illegal monopoly and ordered it split into 34 separate companies. The decision reshaped American antitrust law and the oil industry.
As First Lord of the Admiralty, Winston Churchill drives the switch of British warships from coal to faster oil-fired engines, and the government buys a controlling stake in Anglo-Persian. Oil became a matter of national security, tying the state directly to the industry.
The major oil companies draw a red line around the former Ottoman Empire and agree to develop oil inside it only jointly, not compete. The pact locked much of Middle Eastern oil into the hands of a small group of Western firms for decades.
Heads of the biggest oil companies meet secretly at a Scottish castle and agree to freeze their market shares and fix prices worldwide, the 'As-Is' agreement. It set the pattern for the cartel of majors later nicknamed the Seven Sisters.
The new kingdom of Saudi Arabia grants an American company the right to explore its eastern desert for oil, a venture that became Aramco. The deal tied the United States to Saudi oil and marked American entry into a region Britain had dominated.
After years of dry holes, well number seven at Dammam finally strikes oil in commercial volumes, proving Saudi Arabia sat atop enormous reserves. It began the transformation of a poor desert kingdom into the world's swing producer.
President Lázaro Cárdenas expropriates the foreign oil companies after a labor dispute and hands their assets to the new state firm Pemex. It was the first major nationalization of oil and became a model for producer states that followed.
Saudi Arabia forces Aramco into an even split of profits, following Venezuela's earlier lead, replacing the old fixed royalties that favored the companies. The 50/50 formula spread across the oil states and shifted more of oil's wealth toward the producing countries.
Seven Western majors, among them Exxon, Shell, and BP, jointly control most of the world's oil outside the United States and the Soviet bloc. Italian oilman Enrico Mattei mockingly called them the 'Seven Sisters', a name that stuck.
also in Client dictators: the strongmen the powers kept, Land and resources, The resource curse: how the South fed the North
Iran's parliament votes to nationalize the British-owned Anglo-Iranian Oil Company, and Mohammad Mossadegh becomes prime minister on a wave of popular support. Britain, which had drawn huge profits from Iranian oil, responded with an embargo and a naval blockade. The standoff set the stage for the covert campaign that would remove him two years later.
A coup organized by British and American intelligence overthrows Mossadegh and restores the Shah's power. A consortium of Western firms then took over Iran's oil, and American companies gained a large share. (Cross-references covert operations and the Cold War.)
Geologist M. King Hubbert argues that US oil output would peak around 1970 and then decline, a curve later applied to world production. The 'peak oil' debate has run ever since, with each new discovery and technology reopening the question of when oil runs short.
Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela form the Organization of the Petroleum Exporting Countries to defend prices against cuts by the majors. OPEC gave producer states a common front and, in time, real power over the oil market.
Starting with Libya under Qaddafi, one producer after another seizes or buys out the foreign oil companies, and Iraq nationalizes its industry in 1972. By the mid-1970s the era of Western-owned concessions was ending, and the states controlled their own oil.
Arab members of OPEC cut production and embargo states that backed Israel in the Yom Kippur War, and the price of oil roughly quadruples. Gas lines and recession followed in the West, showing the world how much power the producers now held.
In the wake of the embargo, the United States and Saudi Arabia reach understandings that keep oil priced in dollars and recycle Saudi earnings into US assets. The petrodollar system underpinned American financial power and gave Washington a lasting stake in Gulf stability.
Exxon's internal researchers tell management that burning fossil fuels is warming the planet and that the effects could be serious, according to company documents later made public. The findings broadly tracked the emerging scientific consensus of the time.
The revolution in Iran disrupts its oil exports and sends prices spiraling upward a second time. The twin shocks of the 1970s reshaped the world economy, driving inflation, conservation, and a hunt for oil outside OPEC.
New supply from the North Sea, Alaska, and elsewhere, plus Saudi Arabia opening its taps, sends oil prices crashing. The glut ended the boom of the 1970s and strained oil-dependent economies from Texas to the Soviet Union.
The tanker Exxon Valdez runs aground and spills millions of gallons of crude into pristine Alaskan waters. The disaster fouled hundreds of miles of coast, became a symbol of the industry's risks, and reshaped US oil-spill law.
Oil companies and allies form groups such as the Global Climate Coalition to question the science of global warming and block emissions limits. Investigations and the firms' own records document a decades-long campaign to sow doubt even as their scientists understood the risk.
A US-led coalition drives Iraq out of oil-rich Kuwait after Saddam Hussein's invasion. Supporters framed it as defending a small nation, while critics charged it was a war fought to protect oil supplies, coining the slogan 'no blood for oil'.
Nigeria's military government executes writer and activist Ken Saro-Wiwa, who led protests against oil pollution and Shell's operations on Ogoni land. His death drew global outrage and became a landmark case in debates over oil, human rights, and corporate responsibility. (Cross-references the resource curse and the corporation.)
A US-led invasion topples Saddam Hussein, justified officially by claims of weapons of mass destruction that were never found. Many critics argued oil was a central motive, a charge the governments involved denied. (Cross-references covert operations and the Middle East.)
BP's Deepwater Horizon rig explodes, killing 11 workers and unleashing the largest marine oil spill in history over nearly three months. The blowout exposed the dangers of drilling ever deeper offshore and led to record fines and tighter rules.
Hydraulic fracturing and horizontal drilling unlock vast oil and gas from shale rock, turning the United States into the world's top producer within a decade. The boom upended peak-oil forecasts and OPEC's grip on prices, while raising new fights over water, methane, and climate.