An Unlikely Oil Baron
Peter Doran tells the story of Marcus
Samuel Jr. a Jewish 19th century trader who rises from the hard
scrabble neighborhood of Houndsditch, London to the heights of the global oil business
and a high peerage in the Court of Saint James. Doran’s book is in the
tradition of Daniel Yergin’s “The Prize” and Anthony Sampson’s “The Seven
Sisters” and is filled with the high drama of the early years of the oil
industry. The oil business of 1900 was
far different than today. Rockefeller’s Standard Oil dominated the industry
like no other and kerosene, not gasoline was its main product.
However change was in the wind. The oil
production capital was moving from the depleted oilfields of the United States
to the booming Baku oil fields of Russia. There the Nobel Brothers and the Rothschild’s
were beginning to upset Rockefeller’s hold on the global oil market. Into this milieu
comes Marcus Samuel. He has the strategic vision to move Russian oil through
the Suez Canal to the Asian markets he knew so well.
The one problem was that the Suez Canal,
for safety reasons, refused to allow oil tankers to enter the canal. It here
where Samuel has designed and built a double-hulled tanker that convinces the
canal officials to allow passage. Of a sudden, Standard Oil was threatened with
cheap Russian oil in Asia under the name of Shell Transport and Trading, the
Shell Oil name of today.
Competing with Samuel in Asia was Henri
Deterding’s Rothschild backed Royal Dutch. Using geological science Deterding
discovers a gusher in Sumatra that underprices Shell. After several years of
competing with each other Deterding gains the upper hand by forcing a merger
with Shell that forms Royal Dutch/Shell Group of today based on a 60/40 split
favoring Royal Dutch.
This combination along with the
anti-trust beak-up of Standard Oil in 1911 ends Rockefeller’s grip over the
global oil business. Doran’s theme throughout is as his title suggests is
breaking Rockefeller and the monopoly he represented. He ends his story with
the death of Samuel in 1928, but in the same year Royal Dutch/Shell joins up
with Standard Oil and other oil majors with Achnacarry and Red Line Agreements
which effectively cartelizes the global oil industry, so much for competitive
markets.
Doran is a good story teller whose work
was handicapped by the burning of most of Samuel’s files at his death. Although
he takes a few side trips away from his basic story, he holds the reader’s
interest throughout.
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