Oil, also known as petroleum, has been used by mankind for thousands of years. Of course the function and development has progressed over time. The use of coal as a main energy source has slowly been phased out in the 20th century in order to be replaced by petroleum products.
Despite mankind’s early awareness of this resource, it wasn’t sold until the early 1800s when merchants in western Pennsylvania built dams to purposely allow this viscous substance to rise up and float on the water’s surface. They placed blankets in the water and wrung the petroleum out of them. It was then sold for $2 per gallon.
However, the petroleum industry wasn’t established until the late 1800s. In the mid 1850s, the innovative kerosene lamp created a need for fuel and led to the establishment of the Pennsylvania Rock Oil Company, the first of its kind. Things really took off when John D. Rockefeller founded the Standard Oil Company in 1870.
The first refinery was built in Pennsylvania by his company. Under Rockefeller’s leadership, operations extended nationwide. Despite fierce competition, Standard became the leader in the industry and eventually controlled 80 percent of the market.
In 1909, federal courts divided Standard into 34 individual companies. They still dominated the first two decades of the 20th century, even though major efforts to expand production efforts in the Middle East were in process. Exploration began in Persia and extended to Turkey.
The discovery of the Burgan oilfield in Kuwait in the late 1930s, and the Ghawar oilfield in Saudi Arabia a decade later, marked important milestones in the history of the petroleum industry. The latter is still the largest oilfield to have been unearthed.
The USA produced half of the world’s petroleum until 1950. The other share was mainly divided among the Dutch East Indies. As the industry unfolded globally in the subsequent decades, Asia, Europe and Russia started to play prominent roles in production.
With the expansion of automobile manufacturing in the 1950s, petroleum consumption increased steadily. In 1974, preceding global economic and political changes led to the establishment of the International Energy Agency (IEA). Its members included the USA, Japan, Canada and Western Europe.
The organization’s objectives covered many aspects. These included development of alternative energy sources and energy conservation in order to reduce dependence on petroleum. Another goal was to encourage cooperation with countries that produce and use this fuel in order to effectively manage world energy resources.