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Standard Oil: World’s First Multinational Oil Corporation

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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.

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2 Comments
  1. instafamoushub.com says

    Multinational oil corporations do not only have to form relationships with other states, but they have to coordinate with each other. Looking to the future, American oil corporations will be faced with the challenge of competing with Saudi Aramco, the largest multinational corporation in the world. As this one entity has more power than any other American based company, it has the power to bend the U.S. to their will. The question that remains is: How will the American values modeled by multinational corporations abroad continue future diplomatic relations?

    1. The Oil Bloc says

      You have made a very succinct and apt point. Diplomatic relations do not entirely rely on the oil and gas industry, although the sector is used as a weapon or suffers as a result of faulty relations. An example is the ongoing trade war between the U.S.A and China which is affecting the oil price.

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