History of The Oil Tanker - Breaking The Standard Oil Monopoly

Breaking The Standard Oil Monopoly

The 1880s also saw the beginnings of the Asian oil trade. The oil industry in Azerbaijan was the largest producer in the world at that time, but was limited to the Russian market. John D. Rockefellers Standard Oil dominated the world market. The Rothschilds already had constructed a railway to the Black Sea.

The idea that led to moving Russian oil to the Far East via the Suez Canal was the brainchild of two men: importer Marcus Samuel and shipowner/broker Fred Lane — the London agent for the De Rothschild Frères. Prior bids to move oil through the canal had been rejected by the Suez Canal Company as being too risky. Samuel approached the problem a different way: asking the company for the specifications of a tanker it would allow through the canal.

Armed with the canal companies specifications, Samuel had James Fortescue Flannery designing tankers for Bnito — the Russian oil company of the Rothschilds — and ordered three tankers from William Gray & Company in northern England. Named the Murex, the Conch and the Clam, each had a capacity of 5,010 long tons of deadweight. In 1893 the Samuel brothers founded the Tank Syndicate together with Fred Lane and Asian trading companies. In 1897 it was renamed Shell Transport and Trading company, forerunner of today's Royal Dutch Shell company.

With facilities prepared in Jakarta, Singapore, Bangkok, Saigon, Hong Kong, Shanghai, and Kobe, the fledgling Shell company was ready to become Standard Oil's first challenger in the Asian market. On August 24, 1892, the Murex became the first tanker to pass through the Suez Canal.

In the meanwhile, in 1890 the Koninklijke Nederlandsche Maatschappij tot Exploitatie van Petroleumbronnen in Nederlandsch-Indie (KNMEP) ("Royal Dutch Company for the Working of Petroleum Wells in the Dutch Indies") — part of Royal Dutch Petroleum — was founded. In 1892 it found oil near Pangkalan Brandan on Sumatra, just some months before Samuels kerosene arrived in Singapore. At first, chartered ships were used, but in 1896 KNMEP launched its first tankers, the Besitang and Berandan. The threat of the Tank Syndicate was reduced as the Dutch government excluded them from trading in the Dutch East Indies. To prevent a hostile takeover by Standard Oil, preference shares were issued. By the time Shell merged with Royal Dutch Petroleum in 1907, the company had 34 steam-driven oil tankers. Standard Oil started building tankers the same way as Shell and by 1900 owned around 60 tankers.

From 1912 Compañía Mexicana de Petróleo El Aguila ("Mexican Eagle Petroleum Company") — founded in 1909 by Weetman Pearson to develop the newly found Mexican oil fields, nationalized in 1938 as Pemex — also had its own tanker fleet. They quickly adopted Isherwood's new longitudinal framing system that allowed much larger ships and a simpler construction process. Just before World War I it owned a fleet of 20 tankers. Standard Oil did not participate directly in the newly discovered oil fields in Texas — such as Spindletop — and Oklahoma, which gave opportunities for new oil companies as Gulf Oil and Texas Fuel Company, later Texaco. Avoiding the use of Standard Oil's pipe line system, they started using tankers to get their oil to the East Coast. In combination with the oil fields discovered in Mexico and Venezuela, this caused a rise in the demand for tankers, which gave opportunities for the first independents, such as the Norwegian Wilh. Wilhelmsen, that launched its first tanker in 1913.