Daily Archives: 14 January 2014

Early Oil Rush Days, 1913

From Lawrence in Arabia: War, Deceit, Imperial Folly and the Making of the Modern Middle East, by Scott Anderson (Doubleday, 2013), Kindle Loc. 950-966:

In 1913, Socony was primarily an exporter of petroleum products, and China was by far its largest market. In comparison, the company’s exports to the Ottoman Empire, primarily kerosene to fuel its embryonic industrial facilities, were minuscule. To put into perspective how minuscule, while Standard’s kerosene represented the second biggest American export to the Ottoman Empire, the largest was Singer sewing machines.

But as the Standard vice president, William Bemis, had explained to the three men brought to his office that morning, they weren’t being sent to the Near East to rustle up new purchasing clients, but rather to find and develop new sources of oil.

It was simple economics. By the end of 1913, the exponentially growing demand for oil and petroleum products around the globe meant that demand would soon outstrip supply. In the United States alone, the number of combustion-engine vehicles on the road had increased twentyfold in less than a decade, from some seventy-five thousand in 1905 to well over 1.5 million in 1913—and already a number of the oldest American oilfields were starting to run dry.

Oil was rapidly becoming a crucial military asset as well. In 1912, just a year before [William] Yale’s summoning to New York, the first lord of the admiralty of Great Britain, Winston Churchill, had made international headlines with his plan to convert the entire Royal Navy from coal to oil. As might be expected, this proposed modernization of the world’s most powerful fleet was already causing the navies of other nations, including Germany, to scramble to follow suit.

As a consequence, both American and European oil companies were now rushing to find and exploit new fields wherever they might exist. One especially promising region was the Near East. In the 1870s, huge oil and gas deposits had been discovered around Baku on the Caspian Sea, and this had been followed by another large strike in the Persian Gulf in 1908. Those fields were quickly dominated by European consortiums, and the race was on to tap and lay claim to the next big find.

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