Big Oil

Chart of the major energy companies dubbed "Big Oil" sorted by 2005 revenue

Big Oil is a name used to describe the world's six or seven largest publicly traded oil and gas companies, also known as supermajors.^[1][2][3][4] The term emphasizes their economic power and influence on politics, particularly in the United States. Big Oil is often associated with the fossil fuels lobby and also used to refer to the industry as a whole in a pejorative or derogatory manner.^[5]

The supermajors are considered to be BP, Chevron, Eni,^[6] ExxonMobil, Royal Dutch Shell, TotalEnergies,^[1] and ConocoPhillips.^[2]

The term, analogous to others such as Big Steel and Big Tech that describe industries dominated by a few giant corporations, was popularized in print from the late 1960s.^[7][8] Today it is often used to refer specifically to the seven supermajors.^[9] The use of the term in the popular media often excludes the national producers and OPEC oil companies who have a much greater global role in setting prices than the supermajors.^[10][11][12] Both the Sinopec Group and the China National Petroleum Corporation, which are state-owned Chinese oil companies, had greater revenues in 2019 than any of the supermajors.^[13]

In the maritime industry, six to seven large oil companies that decide a majority of the crude oil tanker chartering business are called "Oil Majors".^[14]

History[]

The history of the supermajors traces back to the "Seven Sisters", the seven oil companies which formed the "Consortium for Iran" cartel and dominated the global petroleum industry from the mid-1940s to the 1970s.^[15][16] The Seven Sisters were:

• Anglo-Persian Oil Company (now BP);
• Gulf Oil, Standard Oil of California (Socal) and Texaco (now Chevron);
• Royal Dutch Shell
• Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil).

Before the oil crisis of 1973 the members of the Seven Sisters controlled around 85% of the world's oil reserves. The supermajors began to emerge in the late-1990s, in response to a severe fall in oil prices. Large petroleum companies began to merge, often in an effort to improve economies of scale, hedge against oil price volatility, and reduce large cash reserves through reinvestment.^[17] The following major mergers and acquisitions of oil and gas companies took place between 1998 and 2002:

• Exxon's merger with Mobil in 1999, forming ExxonMobil;
• Total's merger with Petrofina in 1999 and with Elf Aquitaine in 2000, with the resulting company subsequently renamed Total S.A. (now TotalEnergies SE);
• BP's acquisitions of Amoco in 1998 and of ARCO in 2000;
• Chevron's acquisition of Texaco in 2001;
• Conoco Inc.’s merger with Phillips Petroleum Company in 2002, forming ConocoPhillips.

This process of consolidation created some of the largest global corporations as defined by the Forbes Global 2000 ranking, and as of 2007 all were within the top 25. Between 2004 and 2007 the profits of the six supermajors totaled US$494.8 billion.^[18]

Influence[]

As a group, the supermajors control around 6% of global oil and gas reserves. Conversely, 88% of global oil and gas reserves are controlled by the OPEC cartel and state-owned oil companies, primarily located in the Middle East.^[19] A trend of increasing influence of the OPEC cartel, state-owned oil companies^[15][20] in emerging-market economies is shown and the Financial Times has used the label "The New Seven Sisters" to refer to a group of what it argues are the most influential national oil and gas companies based in countries outside of the OECD, namely CNPC (China), Gazprom (Russia), National Iranian Oil Company (Iran), Petrobras (Brazil), PDVSA (Venezuela), Petronas (Malaysia), Saudi Aramco (Saudi Arabia).^[21][22]

Maritime Oil Majors[]

In the maritime industry, a group of six companies that control the chartering of the majority of oil tankers worldwide are together referred to as "Oil Majors".^[23] These are: Royal Dutch Shell, BP, ExxonMobil, Chevron, TotalEnergies and ConocoPhillips.^[24][25] Charter parties such as "Shelltime 4" frequently mention the phrase "oil major".^[26]

See also[]

• Big Tobacco
• Big Pharma
• Energy development
• Fossil fuel
• List of largest oil and gas companies by revenue
• Military–industrial complex

References[]

Further reading[]

• Black, Brian C. Crude Reality: Petroleum in World History. New York: Rowman & Littlefield, 2012. ISBN 0742556549
• Blair, John Malcolm (1976). The Control of Oil. Pantheon Books. ISBN 0-394-49470-9.
• Painter, David S. (1986). Oil and the American Century: The Political Economy of US Foreign Oil Policy, 1941–1954. Baltimore, MD: Johns Hopkins University Press. ISBN 978-0-801-82693-1.
• Yergin, Daniel (1993). The Prize: The Epic Quest for Oil, Money & Power. New York, NY: Free Press. ISBN 0-671-79932-0.

External links[]

• "Crude Awakening", NOW, week of 16 June 2006.
• "Big Oil's bigtime looting", editorial from the Boston Globe, 2 September 2005.
• "Big Oil bears brunt over gas prices", Reuters, 23 October 2005.
• "In heated hearings, oil bosses defend big profits", Associated Press (via CNN), 9 November 2005.
• List of World's Largest Oil and Gas Companies Ranked by Reserves
• Who are the major players supplying the world oil market?