A Giant-Sized History Of Oil

Posted on by Brian Colwell

From decomposed organic material forgotten for hundreds of millions of years, to diplomacy commodity and petroleum politics, the ascent of oil as fuel for the rise (and fall?) of society seems unreal. Power struggles, international climate policy, supply uncertainty … these are just a few of the always present risks associated with this shift from geopolitics of states to geopolitics of energy. In addition, low oil prices are a challenge to Russia, the Middle East, and South East Asia, and are expected to upend geopolitics globally. Needless to say, the next generation of humans will have their hands full: energy sovereignty isn’t going away as a primary demand and essential need.

But how did we get here?

The history of oil can be divided into three parts:

Prehistory to 1815: Era Of Small-Scale Use

Lifeblood of the industrialized nations, oil has been the world’s most important source of energy since World War II. Oil literally fuels the growth of society. With wars fought for control of this geopolitics-charged commodity for over fifty years, it’s easy to forget that oil has a history beyond the current era. But oil was known to the Ancient Egyptians and important to city growth and war strategy by the 6th century BCE. Read on to find out how important this commodity was before it was an energy essential.

1816 to 1938: Era Of Excavation

The 19th century saw an explosion of oil exploration, production, distribution, and use, with oil among the most important commodities of the century, next to steel. This was an era of entrepreneurial growth and scientific discovery for oil, setting the stage for the modern era with the introduction of Standard Oil, the automobile, and global warfare.

1939 to Present: Era Of Geopolitics

With oil as lubricant for international conflict, this era has seen national and ideological agendas pushed forward over the energy policies of industrialized nations, including China, Russia, The United States, Saudi Arabia, and Venezuela, to name but a few. Tech innovations during this era led to oil becoming an indispensable commodity and geopolitical hot-button, with the U.S. military currently the largest institutional consumer of oil in the world. In the era of oil geopolitics, those with the ability to exert their influence to gain control of oil resources don’t question right vs. wrong. Rather, they consider energy independence vs. sovereignty weakness.

The History Of Oil

  • Oil was created from the decomposition of organic materials under intense heat and pressure hundreds of millions of years ago. It took 23.5 tonnes of ancient, buried plants to produce 1 litre of petrol.
  • In ancient Egypt, the use of bitumen was important in preparing Egyptian mummies.
  • 18th century BCE: Asphalt was used in ancient Babylon as mortar for buildings and for waterproofing ships.
  • 8th century BCE: Tar was first used in Baghdad to pave roads.
  • 6th Century BCE: The army of Kir II, first shah of the Achaemenid Empire (present day Iran), used oil in weapons of fire during invasions.
  • Crude oil was first pumped from the ground in Sichuan, China 2,500 years ago.
  • c.450 BCE: Herodotus claimed that asphalt was used in the construction of the towers of Babylon, around 2,000 BCE.
  • 325 BCE: Alexander the Great used flaming torches of petroleum products to scare his enemies.
  • c.50: Pliny the Elder observed “eternal fires” around the Absheron peninsula.
  • c.100: Plutarch described oil bubbling from the ground near Kirkuk in present day Iraq.
  • 347: The earliest known oil wells were drilled in China.
  • 7th century: Petroleum was known as burning water in Japan.
  • 673 to 678: Greek fire was first used by the Greeks besieged in Constantinople. It ignited on contact with water, and was probably based on naphtha and quicklime. Naphtha is a flammable oil containing various hydrocarbons, obtained by the dry distillation of organic substances such as coal, shale, or petroleum.
  • 9th Century: Arabian traveler Baladzori (Al-Belazuri Ahmed) describes in “The Conquest of the countries” that political and economic life on Absheron had been long connected with oil.
  • 1088: In his book Dream Pool Essays, the polymathic scientist and statesman Shen Kuo of the Song Dynasty coined the word 石油 (Shíyóu, literally “rock oil”) for petroleum.
  • 12th century: Distillation became available in Western Europe through Islamic Spain.
  • 1264: When Marco Polo visited the Persian city of Baku he saw oil being collected from seeps.
  • 1539: Intended as a gout treatment for the Holy Roman Emperor Charles V, oil is exported from Venezuela.
  • 1556: The word petroleum, Latin for “rock oil,” is first cited in a work by German mineralogist Georg Bauer.
  • 1595: The earliest mention of petroleum in the Americas. Sir Walter Raleigh’s account of the Trinidad Pitch Lake.
  • 1647: Turkish traveller Evliya Chelebi examines and thoroughly describes Baku oil fields while in Baku. According to his data, Baku oil brought 7000 tumans of annual income to Shah’s treasury and was exported to Persia, Central Asia, Turkey and India.
  • 1657: The Jesuit Relations of 1657 states: “As one approaches nearer to the country of the Cats, one finds heavy and thick water, which ignites like brandy, and boils up in bubbles of flame when fire is applied to it. It is, moreover, so oily, that all our Savages use it to anoint and grease their heads and their bodies.”
  • 1710: Eirini d’Eyrinys discovered asphaltum at Val-de-Travers.
  • 1723: Peter the Great (1672-1725) issues special decrees about the order of oil extraction in a letter to major-general Michael Matyushkin, who governed Baku.
  • 1745: Empress Elizabeth of Russia orders the first oil well and refinery built in Ukhta. Oil sands were mined in Merkwiller-Pechelbronn, Alsace under the direction of Louis Pierre Ancillon de la Sablonnière, by special appointment of Louis XV.
  • 1753: Peter Kalm showed the oil springs of Pennsylvania on a map in his work, Travels into North America.
  • 1775: During the Revolutionary War, Native Americans taught George Washington’s troops how to treat frostbite using oil.
  • 1781: Count Marko Voynovich (1750-1807) finds signs of oil and gas on the bottom of the Caspian Sea near the island Zhiloy (Chilov).
  • 1816: Start of the U.S. manufactured gas industry with the Gas Light Company of Baltimore.
  • 1819: Edwin Laurentine Drake was born on March 29, 1819.  Drake is known as the ‘father of the petroleum industry’ because the technology he devised revolutionized how crude oil was produced and launched the large-scale petroleum industry.
  • 1821: The U.S. natural gas industry started in Fredonia, Chautauqua County, New York, when William Hart dug a well to a depth of 27 feet into gas-bearing shale and piped the natural gas to a nearby inn where it was burned for illumination.
  • 1846: The first oil well (with percussion tools) in the world was drilled in the South Caucasus region of Russian Empire, on the Aspheron Peninsula north-east of Baku.
  • 1847: James Young noticed a natural petroleum seepage in the Riddings colliery at Alfreton, Derbyshire from which he distilled a light thin oil suitable for use as lamp oil, at the same time obtaining a thicker oil suitable for lubricating machinery.
  • 1850: Gesner created the Kerosene Gaslight Company and began installing lighting in the streets in Halifax and other cities. Young & Meldrum and Edward William Binney entered into partnership under the title of E.W. Binney & Co. Their works at Bathgate were completed in 1851 and became the first truly commercial oil-works and oil refinery in the world.
  • 1853: Samuel Kier established America’s first oil refinery in Pittsburgh.
  • 1854: The first rock oil mine was built in Bóbrka, near Krosno in central European Galicia (Poland).
  • 1855: Benjamin Silliman’s “Report on Rock Oil, or Petroleum, from Venango County, Pennsylvania” indicates the wide range of useful products that could be made from petroleum. Silliman’s report lends credence to the idea that oil could be a profitable commodity.
  • 1857: Historic oil well drilled by the American Merrimac Company in La Brea (Spanish for “Pitch”) in southeast Trinidad in the Caribbean.
  • 1858: The first commercial oil well in Canada became operational at Oil Springs, Ontario (then Canada West). The discovery at Oil Springs touched off an oil boom which brought hundreds of speculators and workers to the area.
  • 1859: Samuel Downer, Jr. patented “Kerosene” as a trade name and licensed its usage. The modern U.S. petroleum industry is considered to have begun with Edwin Drake’s drilling of a 69-foot oil well in 1859, on Oil Creek near Titusville, Pennsylvania, for the Seneca Oil Company.
  • 1861: Baku produced about 90% of the world’s oil.
  • 1863: Significant oil fields discovered in Peru, in Zorritos District.
  • 1865: Rockefeller became the first oil “baron” when he formed Standard Oil Company.
  • 1866: Railroad oil tank cars become an oil field innovation on April 10, 1866, when James and Amos Densmore of Meadville, Pennsylvania, were granted a patent for their “Improved Car for Transporting Petroleum.”
  • 1872: Rockefeller took over 22 of his competitors (The Cleveland Massacre) to increase Standard Oil share of market to 25%.
  • 1875: Crude oil was discovered by David Beaty at his home in Warren, Pennsylvania. This led to the opening of the Bradford oil field, which, by the 1880s, produced 77% of the global oil supply.
  • 1877: Rockefeller controlled 90% of American refining. The world’s first oil tanker, the steam-powered Zoroaster, was built by the Nobel Brothers to transport kerosene in the Caspian.
  • 1878: Oil industry enter recession.
  • 1885: Significant oil fields discovered in the Dutch East Indies, in Sumatra.
  • 1895: The Diesel engine. Interestingly, the Diesel engine is named after the inventor, not the fuel, and the original fuel it was developed to run on was peanut oil.
  • 1897: Marcus Samuel forms Shell Transport and Trading.
  • 1901: The Texas Oil Boom and the modern industrialization of oil production in the U.S. began with a major gusher at Spindletop on January 10th, 1901 near Beaumont, Texas.
  • 1903: Henry Ford incorporates the Ford Motor Company.
  • 1905: “End of Oil” predicted in article in The Horseless Age: “The available supply of gasoline, as is well known, is quite limited, and it behooves the farseeing men of the motor car industry to look for likely substitutes.”
  • 1907: Shell (British) and Royal Dutch merged to form Royal Dutch Shell. The discovery of oil in Iran by a British former gold miner and a Middle Eastern shah led to the incorporation of the Anglo-Persian Oil Company.
  • 1908: Ford’s mass-produced Model T introduced, making the automobile accessible to many Americans and driving consumer demand for gasoline, a previously little used byproduct of the petroleum refining process. Significant oil fields discovered in Persia, in Masjed Soleiman.
  • c.1910: Thomas Midgley came up with the idea of putting lead in petrol and invented CFCs.
  • 1911: the Supreme Court declared that the Standard Trust had operated to monopolize and restrain trade, and it ordered the trust dissolved into thirty-four companies.
  • 1914: British government purchased 51% of the Anglo-Persian Oil Company in 1914 to ensure sufficient oil for the Royal Navy. The company became British Petroleum in 1954 and is now BP. Significant oil fields discovered in Venezuela, in the Maracaibo Basin.
  • Fun fact: WW1 planes used Castor Oil as engine lubricant and the pilots suffered from persistent diarrhea due to unburnt castor oil coming out of the exhaust.
  • 1917: Use of oil during the WW1 increases so rapidly due to new technologies that a severe shortage developed in 1917-18.
  • 1919: Gasoline sales exceeded kerosene sales.
  • 1924: Teapot Dome scandal regarding the U.S. Naval Oil Reserves and resulting in the resignation of the Secretary of the Interior (Albert Fall) and Secretary of the Navy (Edwin Denby).
  • 1930s: Gulf Oil, BP, Texaco, and Chevron were involved in concessions that made major discoveries in Kuwait, Saudi Arabia, and Libya.
  • 1932: Chaco War (1932–1935).
  • 1933: Standard Oil secured the first contract to drill for oil in Saudi Arabia.
  • 1935: Du Pont scientist Wallace Carothers invented Nylon, the first purely synthetic fiber, using petroleum-based hydrocarbons.
  • 1938: Large-scale oil discovered in Kuwait and Saudi Arabia. Mexico nationalizes foreign oil companies, all assets placed under the control of Pemex. Vast reserves of oil were discovered in the Al-Ahsa region along the coast of the Persian Gulf.
  • 1939-1945: World War II. Control of oil supply from Baku and Middle East played a huge role securing victory for the allies.
  • 1947: Significant oil fields discovered in Alberta, Canada.
  • 1948: Ghawar Field discovered in Saudi Arabia, brought into production in early 1951.
  • 1949: The first commercial application of hydraulic fracturing took place near Duncan, Oklahoma.
  • 1950’s: The first offshore wells were off the coast of Louisiana. Beginning in the 1950s, numerous shifts occurred that transferred control over oil and gas production and pricing from “Big Oil” and oil-consuming countries to oil-producing countries.
  • 1951: Iran nationalized its oil industry then controlled by the Anglo-Iranian Oil Company (now BP), and Iranian oil was subjected to an international embargo. Robert Banks and fellow research chemist Paul Hogan discover two new types of plastic, called crystalline polypropylene and high-density polyethylene (HDPE), while working for Phillips Petroleum.
  • 1956: “Peak oil” concept from geoscientist M. King Hubbert.
  • 1960: OPEC was established  with five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
  • 1967: Great Canadian Oil Sands Ltd (later Suncor) began production of tar sands north of Fort McMurray, Alberta, Canada. Starts of the Biafran War, also known as the Nigerian Civil War (1967–1970).
  • c.1970: “Seven Sisters” was a common term for the seven multinational oil companies of the “Consortium for Iran” cartel, which dominated the global petroleum industry from the mid-1940s to the mid-1970s. Alluding to the seven mythological Pleiades sisters fathered by the titan Atlas, the business usage was popularized in the 1950s by businessman Enrico Mattei, then-head of the Italian state oil company Eni. Prior to the 1973 oil crisis, the Seven Sisters controlled around 85% of the world’s petroleum reserves.The “Seven Sisters” industry group consisted of:
    • Anglo-Iranian Oil Company (now BP)
    • Gulf Oil (later part of Chevron)
    • Royal Dutch Shell
    • Standard Oil Company of California (SoCal, now Chevron)
    • Standard Oil Company of New Jersey (Esso, later Exxon)
    • Standard Oil Company of New York (Socony, later Mobil, now part of ExxonMobil)
    • Texaco (later merged into Chevron)
  • 1973: the Arab members of OPEC announced that they would cut oil production and not ship oil to United States, Europe, and Japan as punishment for supporting Israel.
  • 1975: President Gerald Ford established the Strategic Petroleum Reserve. Venezuelan oil industry nationalized.
  • 1977: Alaska oil pipeline completed.
  • 1979: Ayatollah Khomeini took control of Iran after the Iranian Revolution, forcing the Shah of Iran to flee the country. For the second time in six years, the price of crude oil spiked and gas lines formed at the pump.
  • 1970s oil crisis was followed by 1980s oil glut.
  • 1978: The Amoco Cadiz oil spill.
  • 1979: The Atlantic Empress oil spill. The Ixtoc 1 oil spill.
  • 1980: Iran–Iraq War (1980–1988).
  • 1983: The Castillo de Bellver oil spill. The incidents at the Nowruz Oil Field.
  • 1984: Iraq began the Tanker War in 1984 by attacking Iranian oil facilities and vessels trading with Iran.
  • 1989: Exxon Valdez oil spill.
  • 1990: Gulf War (1990–1991).
  • 1991: Iraq invaded neighboring Kuwait over disputes about Iraqi war debts, Kuwaiti oil overproduction, Iraqi claims that Kuwait was rightfully a part of Iraq and probably a desire to seize Kuwait’s oil reserves. Iraqi’s dump hundreds of millions of oil into the Persian Gulf in an attempt to deter coalition forces from pursuing their attack.
  • 1992: Iraqi no-fly zones conflicts (1992–2003). The Mingbulak (or Fergana Valley) oil spill.
  • 1994: The Kolva River oil spill.
  • 1997: Mitchell Energy performed the first slickwater frack.  This method substantially lowered the cost of hydraulically fracturing wells, leading to a boom in North American oil and gas production.
  • 2003: Iraq War (2003–2011).
  • 2004: Conflict in the Niger Delta.
  • 2006: just 10 oil fields accounted for 29.9% of the world’s estimated proven reserves and 20.4% of the world’s production.
  • 2007: Hugo Chavez’s decision in 2007 to abandon production agreements and other forms of collaboration with IOCs in Venezuela tightened control of PDVSA’s (The National Oil Company of Venezuela) production and access to reserves by the government.
  • 2009: Transocean’s Deepwater Horizon hit a depth of 10,683 meters, making it the deepest well in the world. The record was short-lived, as the Deepwater Horizon blew up just over six months later.
  • 2010: The Deepwater Horizon oil spill – 4.2 million barrels of oil into the Gulf of Mexico.
  • 2012: Heglig Crisis, South Sudan–Sudan border conflict.
  • 2015: Russian military intervention in the Syrian Civil War. The countries with the world’s largest reserves of crude oil were Venezuela, Saudi Arabia, and Canada. In order of highest to lowest revenue, the five largest oil and gas companies were: Saudi Aramco, Sinopec, China National Petroleum Corporation, PetroChina, and Exxon Mobil. 2015 was the worst year for oil discoveries since 1952.
  • 2016: Global oil discoveries fell to a record low in 2016 as companies continued to cut spending and conventional oil projects sanctioned were at the lowest level in more than 70 years, according to the International Energy Agency. Oil discoveries declined to 2.4 billion barrels in 2016, compared with an average of 9 billion barrels per year over the past 15 years. Meanwhile, the volume of conventional resources sanctioned for development last year fell to 4.7 billion barrels, 30% lower than the previous year as the number of projects that received a final investment decision dropped to the lowest level since the 1940s. In 2016, only 13% of all conventional resources sanctioned were offshore, compared with more than 40% on average between 2000 and 2015. In the North Sea, for instance, oil investments fell to less than USD 25 billion in 2016, about half the level of 2014.
  • 2017: Latin America dominated 2017 in terms of discovery size, holding six of the top ten wells. Two significant discoveries were made in Mexico, both holding between one and two billion barrels of oil equivalent in place. In South East Asia there were 18 discoveries recorded during 2017 with the largest, in excess of 100 MMboe, in Indonesia and Myanmar. The largest Middle East discovery reported during 2017 came from Lukoil’s Eridu 1 new-field wildcat drilled onshore in the Mesopotamian Basin of southern Iraq.
  • 2018: Global oil discoveries see remarkable recovery in 2018. ExxonMobil’s string oil discoveries continue in Stabroek block with three major oil discoveries reported in 2018 – Ranger, Pacora and Longtail, which together could hold almost 1 billion barrels of oil or more. These finds followed previous major discoveries on the block at Liza, Payara, Snoek and Turbot. The United States reported oil discoveries at Ballymore and Dover prospects in the Norphlet play in deepwater Gulf of Mexico. America’s oil and gas reserves doubled with massive new Permian discovery. The top 5 countries in order of discovered volumes in 2018 were: Guyana, Russia, United States, Cyprus, Oman. In 2018, Bahrain made its biggest oil discovery in history.
  • 2019: Venezuela Civil War. Note on U.S. energy geopolitics: “The renaissance in U.S. oil and gas production over the past decade has been nothing short of remarkable. Technological advances unlocked new resources and brought about significant changes in global energy markets. Although growing U.S. oil production has changed the balance of power in oil markets, the U.S. industry is not structured to use its production toward geopolitical ends. Unlike the national oil companies of OPEC, the U.S. industry is made up of dozens of companies that make individual investment and production decisions based on their own costs, financial positions, and appetites for risk.”

Thanks for reading!