When you think about the most valuable companies in the world, you probably think of companies like Apple, Amazon, or Microsoft. But, for most of the last 2 decades, none of those companies were even close to being the most valuable company in the world. That’s because, that title was held by a company that many people haven’t heard of. Its a company that has been quietly influencing the worlds superpowers, and your daily life, more than any other...
The Year is 1914. World War 1 was underway with the allies facing off against the axis powers. But right when the war began, the allies knew they had one key advantage. You see, this was right around the time of the mass production of combustion engine vehicles. So that also meant this was the first war that featured motorized transportation vehicles, tanks, armored cars, planes, ships, trucks, and trains...manyl of which relied upon one thing. Oil.
And fortunately for the allies, they had disproportionate control over the worlds oil supply. In fact, the axis powers controlled only 3% of the worlds oil at the time, while the allies, controlled about 90% of the worlds oil supply. And of that 90%, almost all of it was controlled by the united states, and nearly 90% of the united states oil was controlled by a giant...recently broken up company, called Standard oil.
So, in a sense, standard oil was able to help swing the tides of world war one by supplying britain, france, and eventually, the americans, with all the oil they needed to maintain a strong military force, while abstaining from trade with that of the axis powers.
And it was this act, of supplying the allies with oil, that made businesses and world leaders around the globe realize, that whoever controlled the worlds oil, could control the worlds balance of economic and militaristic power.
And so began the age of oil exploration.
A few years later in 1922, a new zealand military engineer named Frank Holmes thought that the middle east could be a good place to look for potential oil deposits, as no one had actually bothered to look for oil there yet.
So, he was able to get some support from the king of saudi arabia, and by 1924, he had found...no signs of oil. But he persisted. He got approval to search for oil in Bahrain, he then got funding from an american company called SoCal which was a branch of the american company standard oil, and in 1932, after 10 long years of looking for oil in the middle east, the new zealander and standard oil had finally found oil.
And because of this success, the company was able to strike a deal with saudi arabia in order to explore the rest of the country for more oil deposits. So the search continued, the didn’t find much over the next two decades or so, and the oil exploration in saudi arabia was starting to lose some steam. In fact, SoCal had sold off a large portion of its saudi arabia oil business to other american oil companies like texas oil and standard oil of new jersey.
And by the way, its worth noting at this point that standard oil of california, texas oil, and standard oil of new jersey would soon change their names to Chevron, Texaco, and Exxon. And these companies decided to change the name of their saudi arabian oil venture to ARAMCO.
By 1949, Saudi Arabia looked like it might not have as much oil as ARAMCO thought. And after the passing of world war 2, and the resurgence of the importance of oil in warfare, ARAMCO looked like they may never find what they were truly looking for in the middle east.
But then, the 1950s happened. On a fateful day in 1951, ARAMCO discovered the largest offshore oil field in the world in the persian gulf. Six years later, the company discovered the largest onshore oil field in the world, called the ghawar field. And this was when things started to change for ARAMCO.
You see, at this point, ARAMCO was still largely owned by American companies, and split the profits with the saudi arabian government. But over the next few decades, as more and more oil was discovered, the saudi arabian government wanted full control over the oil production that occurred in their territory.
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