Enter Europe
News of American oil quickly spread to Europe and soon Standard Oil was contracting more and more ships to meet this international surge in demand. In the 1870s and 80s, kerosene exports – most to Europe – accounted for half of all US oil production and provided the fourth largest US export in value. Ninety percent of that kerosene came courtesy of Standard Oil.
Europe also quickly realized that oil was not purely an American gift. For centuries, travelers had talked of flaming pillars that burned in Baku on the Caspian Sea and by 1871, the Russian town of Baku was dotted with oil derricks. Russian oil attracted the Rothschilds, a prominent French banking family, into the European Kerosene industry but it found its path blocked by Standard Oil. Undeterred, the Rothschilds decided to sell oil in Asia where Standard’s grip wasn’t as complete.
The man the Rothschilds found to successfully challenge Standard Oil in Asia was Marcus Samuel, a Jewish merchant from London who, thanks to his father, an import/exporter and trader of handmade seashell gifts, had strong shipping connections throughout the Far East. Samuel knew that to succeed against Rockefeller he would have to outlast Standard’s practice of flooding the market with cheap oil. To do that he would have to sell in all Asian markets at the same time ensuring that Standard couldn’t concentrate just on one market. But that meant Samuel would have to get his Russian oil to the Far East before Standard and its large network of international corporate spies found out.
In fashioning a solution, Samuel invented a new way of transporting oil and established one of oil’s most important companies. Rather than shipping barrels of oil, Samuel commissioned the construction of a new ship – one that carried the kerosene in an enormous tank. Second, he cut the sailing distance of these tankers in half by getting safety clearance from the British government to navigate the new Suez canal (kerosene shipments were banned due to the fear of the vessels exploding in the canal) thereby avoiding the long trip around Africa. In 1892, Samuel’s first tanker, the Murex, named for a type of shell, sailed through the canal. Within a decade, his new company, Shell, controlled 90 percent of the oil passing through the Suez canal.