Importance of crude came into dominance only in the 20th century wherein a wide number of jobs in a more civilized world became dependent on oil. History of crude has followed places where it has been discovered and resulted in changing the economic paradigm of these regions forever.
It was first in the mid 19th century when in the region of Pennsylvania crude was discovered for the first time. It was during this time the marketing pundits of that era began speculating on how big this discovery could mean to mankind. On the other hand there was also a school of thought which not gave much importance to it. As a result of these two opposite point of views the prices of crude began to swing up and down. Many of you would be surprised to know that way back in January 1861 soon after crude had been discovered it was being sold at $ 10 a barrel. Within no time crude had the honour of becoming the most precious commodity of that time. Beyond belief for many in less than 12 months time crude was selling at 10 cents per barrel. It would be fair to comment here that Crude was born with volatility as its second name and always had powers to make or break fortunes for business community.
Crude would have only gained importance as it has today if we would have solved the code to transport it. In the earlier days barrels made of oak wood were used to transport this fuel. As at times crude prices would become so low that cost of oak barrels would be often more than that of oil inside them. By 1866 pipelines made from wood carved out and used to transport oil to the rail tanks. The rail tanks would transport oil to nearest refinery which came up in Cleveland, Ohio.
Further discoveries of oil were scattered in the region and had requirement to be transported from the oil fields to the refinery. Soon few business men got associated with the logistics part of it. Further to their liking they realized key to success in the oil business was logistics as it directly had major impact of the costs. A network of pipelines and rail wagons were developed in their region making it relatively easier to transport oil from the oil fields to the refinery. Cleveland developed as a major oil refining hub in the region.
People who had most of the influence over oil were now the businessmen involved in logistics. Once such establishment, 'Standard Oil Company' rose from being a logistical service provider to controlling almost 80% of American Oil business. Three incidents in early part of 20th century also led to major historical changes in crude industry, they were:
1. Texas Oil (Texaco) came into picture in 1901 and eventually became a big player along with 'Gulf'.
2. Anti-trust legislation was used by United States government to break up Standard Oil Company in 1911.
3. World war in 1914 highlighted the importance of crude as it become vital for winning wars.
Hope above has provided you with a brief on historical perspective of crude oil.