History of Oil Industry and Cartels

The interconnected network of infrastructure, operations, and institutions involved in producing and marketing oil.

Oil companies, by controlling the distribution, flow, and production of oil, gained greater power compared to the workers extracting the oil.

The conventional narrative focuses on powerful oil companies and their governments as the main actors in the oil industry, overlooking the crucial role of oil workers.

Oil itself plays a vital role in shaping the methods and tools used to control its production, distribution, and consumption.

The expansion of the oil network, driven by oil's transportability and profitability, led to greater isolation of oil workers compared to coal workers.

The oil industry's focus on controlling the supply of oil, restricting its accessibility, and maximizing profits fueled the industry's growth.

The oil industry's focus is not only on extracting and selling oil, but also on controlling the entire process from production to consumption.

Oil companies, through their actions, aimed to weaken or divert the power of oil workers to maintain their control over the oil industry.

In 1899, a British geological survey confirmed Iraq's potential as an oil-rich region, observing oil seeping from cliffs along the Tigris River, polluting the water.

Deutsche Bank, a prominent German oil company, aimed to control the flow of oil from Mosul, Iraq, to Europe to protect their investments in Romanian oil.

Deutsche Bank acquired the railway concession to Mosul in 1903, but deliberately stalled on construction to prevent oil from reaching European markets.

The British government, after resolving their dispute with France over Egyptian revenue, allowed the development of oilfields near the Suez Canal, a vital shipping route.

Ernest Cassel, a British financier, invested heavily in Egyptian oil rights, aiming to control not just Egypt's oil but potentially all of the Ottoman Empire's.

Shell, a global oil giant, held a similar strategy to Deutsche Bank, prioritizing the control of oil access and profit over active development of the Egyptian oilfields.

The oil industry in the early 20th century involved a struggle between powerful companies to control access to and distribution of oil, even if it meant delaying production.

The oil industries of both Iraq and Egypt faced delays in development due to efforts from powerful companies to control oil access to protect their existing investments and monopolies.

The practice where companies agree to limit production and control prices, effectively eliminating competition.

The development of advanced oil transportation technologies, like pipelines and tankers, revolutionized the industry by making it easier and more efficient to move oil globally.

A strategic alliance formed by Royal Dutch, Shell, and Rothschild to control oil interests in Baku and Romania.

A cartel formed by Rothschild, Nobel, and Deutsche Bank to control kerosene and fuel-oil markets in Western Europe.

The strategic move by oil companies to divide up global oil markets by agreeing on specific regions and sales quotas, effectively controlling the supply and price of oil.

The potential threat posed by oil discoveries in the Middle East, which had the potential to disrupt the established order and introduce new competitors to the market.

The global oil industry in the late 19th and early 20th centuries was marked by a strategic shift from local monopolies to international alliances and cartels.

The constant fear among established oil companies that new and unforeseen oil discoveries might threaten their dominance and control over the market.

The area around Kasr-i Shirin on the border of Persia and Mesopotamia chosen by D'Arcy's drilling team as their first exploration site in 1901.

A British businessman who secured the Persian oil concession in 1901 and competed with Deutsche Bank for Mesopotamian oil rights.

The strategic location of Chiah Surkh near the Khanaqin-Baghdad road, which connected to the Gulf, allowing D'Arcy to block the route for oil pipelines from Baku to India.

The agreement between D'Arcy and Burmah Oil in which they shared rights to the Persian oil concession. Burmah Oil, initially drilling in the Baghdad area, moved its operations to Khuzestan.

The effort of British imperialists, led by Lord Curzon, to expand Britain's influence in Persia and the Gulf, promoting the idea of a struggle against Russia for control of the region.

The group of British imperialists, based largely in India, who supported D'Arcy's venture by promoting British interests in trade, navigation, and other enterprises in the Persian Gulf.

The idea promoted by British imperialists that Britain was engaged in a struggle with Russia for control of Persia and the Gulf.

The strategic area between Persia and the Gulf where the British imperialists viewed Russia as a competitor.

A railway line connecting Istanbul to central Anatolia, built in the 1890s, which failed to make a profit but was heavily subsidized by the Ottoman government to guarantee a return on investment for Deutsche Bank and other bondholders.

The goal of controlling oil resources in Mesopotamia, initially pursued by Deutsche Bank, aimed at ensuring a monopoly by blocking the production of oil and preventing competition.

A political and economic conflict that arose from the rivalry between British and German interests in oil production and control in Mesopotamia, impacting the development of the Baghdad Railway project.

The shift in Ottoman government's stance towards Britain, influenced by the Young Turk Revolution and Britain's success in finding oil in Persia.

British efforts to block the Baghdad Railway project due to the fear of German influence expanding and disrupting British control over oil resources in the region.

The German tactic of stalling the development of oil resources in Mesopotamia to strategically prevent others from entering the market.

The role of oil as a driving force behind the construction of infrastructure like the Baghdad Railway, illustrating how oil resources impacted global politics and economic development.

The Ottoman government, facing financial struggles, granted concessions to the American firm, Chester, hoping to boost trade. However, the Americans were unaware of the syndicate's real motives: control of the Turkish oil market, not trade expansion.

To secure control over Mesopotamian oil, the British formed a consortium with German and Dutch financiers, led by Ernest Cassel, to create the Turkish Petroleum Company.

Deutsche Bank, already holding Mesopotamian oil rights, joined Cassel's syndicate, sharing a nominal 25% stake alongside Shell. This strategically positioned them to directly influence the Turkish oil market.

The new Turkish government, with several of its members on the board of the National Bank of Turkey, was heavily involved in the Turkish Petroleum Company, creating a political and financial alliance.

The Anglo-Persian Oil Company feared the Mesopotamian oil project would disrupt their control over Persian oilfields and potentially threaten Burmah Oil's Indian market.

Realizing they couldn't compete with the powerful coalition, Anglo-Persian sought protection from the British government, using the Ottoman Public Debt to veto the increase in customs duties Turkey needed for its railway project.

Anglo-Persian warned the British government about the potential threat of Shell controlling Mesopotamian oil, claiming they would lower prices to drive them out of business or force a merger, ultimately raising prices and restricting oil supply.

The story of the Turkish Petroleum Company highlights the fierce competition for oil control during the early 20th century, with powerful companies employing political and financial strategies to secure their positions and influence.