After a modest start, the oil industry really
began in the US in the 19th century as the
period of rapid industrialisation took hold.
The new materials being produced meant that
pioneers could explore for and begin pumping
oil from places that previously had lain undiscovered.
Within a year of the discovery of oil at Spindletop
in 1901, in the state of Texas, there were
1,500 oil companies registered which began
the real growth in the US oil industry.
US oil companies then began looking overseas,
first it was to Venezuela in 1910. Historical
documents had pointed to the Spanish incomers
in 16th century utilising bitumen as a sealant.
Then in 1933 came the first contract to drill
for oil in Saudi Arabia after evidence of
oil seeping from the sands in the region.
Then apart from a brief hiatus during the
Second World War, new areas were being discovered
as companies began experimenting with offshore
drilling platforms.
As a consequence of over supply prices began
to drop and as prices fell the expensive process
of investment on long term exploration projects
were put under strain.
By 1960, feeling the need to see a control
of oil production to maintain prices, an agreement
between 14 oil producing nations was made
to control supply. OPEC, the organisation
of oil producing countries, was formed.
The US and Russia, among a number of other
oil producing countries such as Norway, Mexico
and Canada, were not signatories, but nonetheless
controlled output to maintain stable pricing.
The oil crisis in 1973 showed just how powerful
OPEC was with its dominance of membership
by Arab countries. With the US supporting
Israel in the so called Yom Kippur War, the
Arabian producers proclaimed an embargo of
oil exports and as a consequence prices rose
over 400% between October 1973 and March the
following year.
A second oil crisis, during the Iranian Revolution
in 1979 developed, which was then followed
by a 20 year bear market.
Most recently, new technologies have aided
a new oil boom through the use of hydraulic
fracturing oil-based shale structures, although
this is a more expensive delivery and is unlikely
to come to the fore until conventional oil
resources start to run dry.
