OPEC and the Multinational Oil Companies
The international oil companies, mainly Anglo-Saxon, had dominated the world petroleum market for a long time. They first entered into the production of Middle Eastern oil through "concessions" for a specified number of years. All these concessions have turned to "participation" and in some OPEC countries, it is becoming "servicing." Thus, the role of multinational oil companies is changing fast in the world oil market. From a position of almost unlimited control over production, distribution, and pricing policy in the oil-producing countries in the early 1960s, they have now been forced to play a secondary role to the oil-producing governments in regard to crude petroleum production. However, they have managed to maintain their lead in refining, distributing, and marketing petroleum products throughout the free world. It seems apparent that the international oil companies will play an active role in finding, developing, and marketing oil for as long as it is used as a fuel or as a raw material.
How did the free-world oil market become dominated by seven large international oil companies--the so-called Seven Sisters--namely, Exxon, Gulf, Mobil, Standard Oil Company of California (SoCal), British Petroleum (BP), Texaco, and Royal Dutch Shell? 1 It is a long and fascinating history of exclusionary tactics, private companies' attempts to break the barrier through governmental help, a colonial power play by the British Government, lucky strikes of huge oil reserves in Saudi Arabia, and quick discoveries of oil in other parts of the Middle East. When oil was found in Persia (now Iran) at the turn of the twentieth century, the British moved right in, and, with the blessing of His Imperial Majesty, King of the British Kingdom, the Anglo-Saxon Oil Company (now the British Petroleum Company) was formed in 1909. At that time, American oil companies had