Understanding the Legacy of the Breakup of Standard Oil

Breakup of Standard oil

In 1870 John D. Rockefeller co-founded the Standard Oil Company. The company (or “Standard” for short) would grow over the coming decades to be one of the largest businesses in the US at the time. It eventually met its demise, though the breakup of Standard Oil still has a lasting effect on the modern world.

Rockefeller grew Standard through a number of different ways; some more dubious than others. He was incredibly innovative and found ways to increase productivity and efficiencies through economies of scale and vertical integration. In an era of wildly fluctuating oil prices, he was able to reduce prices and ensure more standardized pricing for consumers.

Other methods of his were more dubious. Rockefeller was a shrewd businessman and used every advantage available to him. Secret deals for favorable shipping from railroads and refineries helped Standard to absorb smaller competitors. Using vertical integration, he could also threaten the oil supply to competing refineries if they did not make a deal with him. In some cases there was even documented bribery of legislators.

Nevertheless, by 1904 Standard Oil had grown so large that it controlled 91% of all oil production and 85% of final sales in the US. The size and market share of Standard Oil began to draw the ire of the American public and legislature.

The Legacy of the Breakup of Standard Oil

As a result of the growing discontent of the monopoly-like power, a federal lawsuit was filed against Standard Oil under the Sherman Antitrust Act in 1906. After Standard appealed the unfavorable result, the Supreme Court upheld the decision in 1911. The decision required the company to dissolve as a single entity.

The Legacy of the Breakup of Standard Oil

Later that year the company split into 34 different independent companies. The split was mainly based on geography so the companies did not have to compete heavily with each other. As you can see, some of these companies now exist as the largest energy providing companies in the world.

Standard Oil of California later acquired Standard Oil of Kentucky in 1961. The company renamed themselves Chevron and eventually merged with Texaco in 2000, though kept the Chevron name.

Standard Oil of New York and Standard Oil of New Jersey were two of the largest companies in their own right. Each had a few mergers of their own, and renamed themselves Mobil (NY) and Exxon (NJ). In 1999 the two companies merged to form ExxonMobil.

Standard oil political cartoon
Political cartoon of Standard Oil as a monopoly via Wikimedia

Standard Oil of Indiana and the Standard Oil Company (Ohio) were later renamed Amoco and Sohio, respectively. British Petroleum (BP) bought both the companies at the end of the 20th century.

Leadership later renamed the Ohio Oil Company as Marathon. In the modern day the company re-branded once again as Marathon Petroleum – the largest petroleum operator in the US.

As you can see, the legacy of Standard Oil lives on today in some of the worlds largest energy companies. These companies are what helped guide the US through the 1973 Oil Crisis. While also growing to be powerhouse companies, they also made Rockefeller fabulously wealthy – as he owned nearly a quarter of each of the spin off companies.


To learn more about US history, check out this timeline of the history of the United States.

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