Standard Oil

This article is in need of attention.
Please improve ( this article.

Standard Oil (1863 - 1911) was an oil refining organization founded by John D. Rockefeller (1839-1937) and partners in 1863. Borrowing heavily to expand his business, Rockefeller drew five big refineries including the business concern of Henry Morrison Flagler into one firm, Rockefeller, Andrews & Flagler. By 1868 he headed the world's largest oil refinery.

On January 10, 1870 he formed the Standard Oil Company of Ohio and began his strategy of buying up the competition and consolidating all oil-refining into one company. In 1874, Rockefeller acquired the oil interests of Charles Pratt and Company. The founder Charles Pratt (1830-1891) and his protégé Henry Huttleston Rogers (1840-1909) came with the deal. By 1878 Standard Oil held about 90% of the refining capacity in the U.S. In 1882 the company was reorganized as the Standard Oil Trust. The three key leaders of Standard Oil Trust were Henry H. Rogers, William Rockefeller, and, the most well known, John D. Rockefeller.

By 1890 Standard Oil controlled over 90% of the refined oil flows in the United States and though conspicuous, it was one of many important trusts that dominated key markets; steel and railroad were also concentrated markets. In the same year, The Congress of the United States passed the Sherman Antitrust Act - the source of all American anti-monopoly laws. The law forbids every contract, scheme, deal, or conspiracy to restrain trade, though the phrase "restrain trade" is open to intepretation. Standard Oil Trust quickly attracted attention from antitrust authorities and the Ohio Attorney General filed and won an antitrust suit in 1892.

Standard Oil’s quasi-monopolistic position had developed from aggressively competitive business practices, including purchasing competitors and engaging in volume-discount transportation deals with the railroad companies to ensure it could undercut smaller competitors' prices. This helped kerosene to drop in price from 58 to 26 cents between 1865 and 1870. Competitors might not have appreciated the company's business practices, but consumers appreciated the drop in prices. Standard Oil, being formed well before the discovery of Spindletop and a demand for oil other than for heat and light, was well placed to control the growth of the oil business. It was perceived that it did this by ensuring it owned and controlled all aspects of the trade. Oil literally could not leave the oil field unless Standard Oil agreed to move it: the “posted price” for oil was the price that Standard Oil agents printed on flyers that were nailed to posts in oil producing areas, and producers were in a take-it-or-leave-it position.

Then came Ida M. Tarbell, an American author and journalist, known as one of the leading muckrakers. Following extensive interviews with senior executive Henry H. Rogers, Tarbell's investigations of Standard Oil for McClure's magazine, ran in 19 parts from November 1902 to October 1904. They were collected and published as The History of the Standard Oil Company in 1904. The book fueled growing public attacks on Standard Oil and on trusts in general, and is credited with hastening the 1911 breakup of Standard Oil.

Standard Oil trust organization allowed its oil companies in different states to be headed by the same board of directors. The company was broken up after the United States Supreme Court declared the arrangement to be an "unreasonable" monopoly under the Sherman Antitrust Act on May 15, 1911, though Standard Oil's share of the market had been steadily declining from 1900 to 1910 (Standard's share of oil refining was 64% at the time of the trial, in competition with over a hundred other refiners). The Court's decision required Standard Oil to be broken into separate state companies, each with their own board of directors. Standard Oil’s founder retired shortly thereafter. However, the owners remained in charge of the smaller companies which made up four of the Seven Sisters. The Seven Sisters dominated post World War II international oil market and included British Petroleum, Standard Oil of California (SOCAL), Standard Oil of New Jersey (SONJ), Standard Oil of New York (SOCONY), Texaco, Gulf Oil, and Royal Dutch-Shell. Many of the corporate anagrams from this period (SONJ, SOCONY, TEXACO, SUNOCO, etc.) were adapted from abbreviations used by Western Union to handle their correspondence, much as many contemporary companies have adopted their URL names. Texaco was the Texas Oil Company, Sunoco was the Sun Oil Company. ESSO was a marketing name used by SONJ (Now Exxon-Mobil) and was simply the phonetic transcription of S.O. or Standard Oil.

During a massive strike by employees of the Rockefeller-owned Colorado Fuel and Iron Company, what was referred to as the Ludlow Massacre occurred on April 20, 1914. The state militia fired on a tent city inhabited by workers and their families, causing numerous deaths and a public relations disaster. John D. Rockefeller Jr. was forced to take action to bolster his public image to avert large-scale market losses. [1] (


Standard Oil of New Jersey (SONJ)

SONJ dominated world oil export markets during World War I. Eighty-four percent of Europe’s supplies came from North America and most of that was from SONJ. The company used the war to put significant pressure on its two major competitors, the Royal Dutch-Shell company, headed by Henry Deterding, and the fledgling Anglo-Persian Oil company (which later adopted its marketing name, British Petroleum, to designate the entire company), in which the British Admiralty had a 50% shareholder stake. SONJ used the war to leverage its way into the vast Mesopotamian oil deposits in Iraq: 23.75% of this country’s resources were divided each by Standard Oil of New Jersey (as main stakeholder with a few affiliated companies), the French Compagnie Francaise des Petroles, the Anglo-Persian Oil Company, and Royal Dutch-Shell. The remaining 5% was held by Calouste S. Gulbenkian, whose fortune started the Gulbenkian foundation in Europe. Germany was cut out its promised share from pre-World War I agreements, and also lost control of its oil investments in Rumania and Galicia, an oil producing region in Poland.

Germany’s loss of oil resources led to a complex interaction between geostrategic domination and technological development. The country aggressively pursued synthetic oil-from-coal technologies. These technologies converged with developments in catalytic cracking and refinancing. By the 1920s it was clear that many countries with coal resources would license the German technology to produce oil in order to escape dependency on the “Anglo-Saxon Trusts.” The Big Three oil companies also wanted to maintain their technological lead in refining. A complex series of agreements were worked out in Achnacarry, Scotland. At one level, these agreements were designed to manage competition between the three biggest oil companies: Standard Oil of New Jersey, Anglo-Persian (British Petroleum) and Royal Dutch-Shell. Another series of agreements reached deeper into the control of basic technological processes: the three oil companies collectively agreed that they would not use their new processes to challenge Germany’s I.G. Farben in chemical markets, if the giant German combine agreed to keep its technology from being licensed to companies with an interest in the gasoline and lamp oil markets.

Standard Oil thus had a close business relationship with IG Farben, a Nazi-era chemical company notorious for its use of slave labor synthetic rubber slave labor from Auschwitz. Though Standard Oil of New Jersey was not implicated in the I.G. Farben’s direct operations in Germany, its agreements with that company had significant consequences for the United States. For example, synthetic rubber technology allowed the Nazis to roll over Europe and essentially ignore their lack of access to the rubber of Latin America and Indochina. Because the patent control agreements had kept synthetic rubber from developing in the United States, tire and rubber shortages were a difficulty that had to be overcome during the war. Similarly, high octane fuel used in aviation was “German” under the patent agreements, with the result that during the Battle of Britain, as British planes rose to engage Nazi fighters, a royalty on their high-octane fuel was transferred from British Petroleum to Standard Oil of New Jersey, and from Standard Oil of New Jersey to I.G. Farben via Switzerland. Standard Oil of New Jersey’s president, Walter Teagle, who had been a major architect of these agreements, was forced out of the company in disgrace. The U.S. Senate Committee hearings on these agreements (Committee on Patents, S 2303 and S2491, part 7, 31 July, part 8, 4 August 1942) are among the more interesting resources on pre-World War II political economy.

In the aftermath of World War II the world oil market became somewhat more competitive, the “Big Three” of the pre-World War II era expanding to include the “Seven Sisters” (see above). Standard Oil of New Jersey, now known as Exxon, has for most of this time has been one of the two or three leading industrial companies in the world and in world history. Its recent acquisition of Mobil (formerly Socony) has made the company the world’s largest oil entity. Exxon-Mobil has taken an active stance in the Former Soviet Union’s oil producing regions, both around the Caspian and in producing regions in Siberia.


Successor companies to Standard Oil include:

Other Standard Oils:

Related articles

External links

Nowell, Gregory P. (1994). Mercantile States and the World Oil Cartel, 1900-1939. Ithaca, NY: Cornell University Press. ISBN: 0801428785de:Standard Oil Company ja:スタンダード・オイル zh:标准石油


  • Art and Cultures
    • Art (
    • Architecture (
    • Cultures (
    • Music (
    • Musical Instruments (
  • Biographies (
  • Clipart (
  • Geography (
    • Countries of the World (
    • Maps (
    • Flags (
    • Continents (
  • History (
    • Ancient Civilizations (
    • Industrial Revolution (
    • Middle Ages (
    • Prehistory (
    • Renaissance (
    • Timelines (
    • United States (
    • Wars (
    • World History (
  • Human Body (
  • Mathematics (
  • Reference (
  • Science (
    • Animals (
    • Aviation (
    • Dinosaurs (
    • Earth (
    • Inventions (
    • Physical Science (
    • Plants (
    • Scientists (
  • Social Studies (
    • Anthropology (
    • Economics (
    • Government (
    • Religion (
    • Holidays (
  • Space and Astronomy
    • Solar System (
    • Planets (
  • Sports (
  • Timelines (
  • Weather (
  • US States (


  • Home Page (
  • Contact Us (

  • Clip Art (
Personal tools