Many people with interest in the oil and gas industry are not familiar with the story of the world’s first largest oil corporation. Standard Oil, established in 1870 by John D. Rockefeller and Henry Flagler, was the largest oil corporation in its time before it was pulled down. It was an American oil producing, transporting, refining, and marketing company. The company’s reign ended when the U.S. Supreme Court ruled that Standard Oil was an illegal monopoly.
The case, Standard Oil Co. of New Jersey v. the United States, spanned from around March 14, 1910 – May 15, 1911, when it was decided. Standard oil was found guilty of monopolizing the petroleum industry through a series of abusive and anticompetitive actions. The Court decided to divide Standard Oil into several geographically separate and eventually competing firms.
Standard Oil gained its size through increasing production of goods or services by expansion, acquisition or merger. This process led to a monopoly as it captured most of the market. In the 1880s, Standard Oil used its large market share of refining capacity to go into oil exploration and crude oil distribution and then into the retail distribution of its refined products to stores and service stations throughout the United States. The court decided that the company should be broken up. It was thus broken up into 34 separate companies which still exist till now with many who have recombined.