Growth of petroleum use
The modern petroleum era began when a commercial well was brought into production in Pennsylvania in 1859. Oil industry expanded rapidly as refineries started to make oil products from crude oil. The oil companies later started to export their principal product, kerosene that was used for lighting in all areas of the world. The development of the internal-combustion engine and the automobile created a vast new market for another major product, gasoline. The third major product, heating oil, began to replace coal in many energy markets.
The oil companies, which are based principally in the United States, initially found much larger oil supplies in the U.S. than in other countries. As a result, oil companies from other countries—especially Great Britain, the Netherlands, and France—began to search for oil in many parts of the world, especially the Middle East. The British brought the first field there (in Iran) into production just before World War I. During World War I, the U.S. oil industry produced two-thirds of the world’s oil supply from domestic sources and imported another one-sixth from Mexico. At the end of the war and before the discovery of the productive East Texas fields the U.S. became a net oil importer for a few years.
During the next three decades, with occasional federal support, the U.S. oil companies were enormously successful in expanding in the rest of the world. By 1955 the five major U.S. oil companies produced two-thirds of the oil for the world oil market. Two British-based companies produced almost one-third, and the French a mere one-fiftieth. The next 15 years were a period of serenity for energy supplies. The seven major U.S. and British oil companies provided the world with increasing quantities of cheap oil from the Middle East. The world price was about a dollar a barrel, and during this time the U.S. was largely self-sufficient, with its imports limited by a quota.