"The Club" Rockefeller's Standard Oil Trust in 19 Charts

My one year anniversary post (HERE) got a lot of great feedback, comments and support.

You guys and gals are the best.

And thank you to everyone that pledged $$$ for support.

Right now I can’t open up payments for other reasons but I want you to know I am very appreciative and thank you from the bottom of my oil barrel heart.

As to that last point, things are in the hopper to be doing this full time (insert cliff hanger music)

After ~20 years of digging up historical oil data there are 3 data sets that are almost impossible to find.

1. Pre-1950 global oil demand numbers - BP Historical data will go back to 1965. Prior to that it gets tough. However I do have one book on order that I am hoping will have it.

2. Historical ARAMCO financials - This is pretty much impossible. Exxon, Mobil, Chevron and Texaco didn’t disclose much. I have some historical operational data. But prior to their IPO, financials were and still are a state kept secret and darn near impossible to find. Nonetheless I have some ideas in the works.

3. Standard Oil Financials - Darn near impossible….until now.

Did you know, Standard Oil was so secretive they would refer to people by code name?

Standard Oil Trust was referred to as “Morose” or “The Club” and Rockefeller was called “Chowder.”

IDK if I really like John’s nickname but hey, maybe the dude really liked soup?

Instead of Crude Chronicles I should call myself “Dominoes Thin Crust Pizza.”

I get asked a lot where I find my historical data - especially the pre-1965 stuff, the year in which most of BP’s Historical Stats begin.

Answer - the footnotes and appendixes to the books I read.

That is where I found this gem. I was working on a history of Imperial Oil for my Canadian readers and in a book on the history of Imperial Oil, they reference data from the following.

So naturally I searched for it and couldn’t find it because it’s out of print. But low and behold 6 months later one became available.

These charts are thanks to this book by Hidy & Hidy.

You’ll also see monthly stock price data - That is not from Pioneering in Big Business - I sat in a library and combed through 204 old news papers on microfiche to get that stuff. It’s what I do.

That said, let’s dive right in.

There are a lot of things that are published about Standard Oil but most of them are not entirely true.

In fact a lot of the negative press about the oil & gas industry that is still with us today comes from the days of Rockefeller.

The first misconception: Standard Oil was a monopoly that gouged the consumer.

That is not entirely true. In fact it’s not true at all.

Crude oil and Kerosene prices were essentially flat for much of Standard’s existence. Ya can’t really say the same about your iphone.

I could make the case that monopolies or centralized control of the world’s oil supply is actually good for the consumer.

If you look at the post World War 2 era when the Supermajors controlled ~55% of the global oil supply…

…inflation adjusted oil prices were flat and retail gasoline prices actually fell.

But at the turn of the century populism was on the rise in the form of the trust busters.

Speaking of populism, did you know that as a whole the U.S. consumer spends less than 4% of their pre-tax personal income on energy?

Source: BEA

This pales in comparison to financial obligations, healthcare and taxes all of which are controlled by the government.

In fact, did you know that since World War 2, the most that oil & gas pre-tax profits have ever risen to is about ~2% of ALL U.S. Corporate profits?

Translation - O&G profits don’t matter in the grand scheme of the U.S. government’s tax base.

Source: BEA

Populism….

Sorry, I’ll get off my energy soap box.

The second misconception is that Standard Oil was an integrated oil & gas company.

Yes they had assets spanning upstream and downstream but they made most of their money downstream from the wellhead.

Upstream earnings didn’t really start to make a dent until 1908 and prior to that all the profits came from refining (they called it manufacturing back then), transportation and marketing.