The Seven Sisters
The Seven Sisters was a term coined in the 1950s to describe the seven dominant oil companies that controlled the global petroleum industry from the mid-1940s to the 1970s. These companies formed an oligopoly that significantly influenced world oil production, pricing, and distribution during this period.[1]
History[edit]
The Seven Sisters' common history can be traced back to the 1951 Iranian nationalization of its foreign-dominated oil industry. Following this event, the U.S. State Department suggested creating a consortium of major oil companies to bring Iranian oil production back to international markets.[2]
The term "Seven Sisters" was popularized by Enrico Mattei, the head of the Italian state oil company Eni, who sought membership for his company but was rejected.[3]
Composition[edit]
The Seven Sisters consisted of:
- Anglo-Persian Oil Company (later BP)
- Gulf Oil (later merged with Chevron)
- Royal Dutch Shell
- Standard Oil of California (later Chevron)
- Standard Oil of New Jersey (later Exxon, now part of ExxonMobil)
- Standard Oil of New York (later Mobil, now part of ExxonMobil)
- Texaco (later merged with Chevron)[4]
Market Dominance[edit]
At their peak, the Seven Sisters controlled nearly all of the world's oil production outside the United States and the Soviet Union. By the 1950s, they controlled about 85% of the world's petroleum reserves.[5]
Global Reach[edit]
The Seven Sisters owned nearly all rights to oil in Iran, Iraq, Saudi Arabia, and the Persian Gulf. They established jointly owned companies, such as the Iraq Petroleum Company, to facilitate cooperation and prevent competition among themselves.[6]
Price Control[edit]
The Seven Sisters established a system to determine crude oil pricing. Between the 1920s and early 1970s, there were two markets: the US and non-US. In the US, crude oil prices were set in free markets, while the Seven Sisters largely controlled prices in the rest of the world.[7]
Challenges and Decline[edit]
Rise of OPEC[edit]
The power of the Seven Sisters began to wane with the rise of the Organization of Petroleum Exporting Countries (OPEC), established in 1960. OPEC challenged the Sisters' control over oil production and pricing.[8]
Nationalization[edit]
Many oil-producing countries began to nationalize their oil industries, further eroding the Sisters' control. This trend was exemplified by Iran's nationalization of its oil industry in 1951, which prompted the formation of the oil companies consortium.[9]
New Competitors[edit]
The rise of state-owned oil companies in emerging economies, such as Gazprom of Russia, Saudi Aramco of Saudi Arabia, and China National Petroleum Corporation, further challenged the dominance of the Seven Sisters.[10]
Legacy[edit]
Despite the challenges, the Seven Sisters' influence persisted. As of 2024, descendants of the original Seven Sisters - ExxonMobil, Chevron, BP, and Shell - still play significant roles in the global oil industry, alongside Total and Eni.[11]
The Seven Sisters' legacy includes the development of a global oil infrastructure, the establishment of pricing mechanisms, and the shaping of international relations in the context of energy politics. Their history continues to influence discussions about energy security, market competition, and the geopolitics of oil.
References[edit]
- ↑ History of the Seven Sisters - Baran Can Yücel. Bilkent EPRC.
- ↑ Iran’s Oil, the Theory of Rent, and the Long Shadow of History: A Caveat on Oil Contracts in the Islamic Republic. Cairn.info.
- ↑ The new Seven Sisters: oil and gas giants dwarf western rivals. Financial Times.
- ↑ The New Seven SUPERMAJOR Oil Companies - LDI Training. LDI Training.
- ↑ The 1928 Red Line Agreement. Office of the Historian, U.S. Department of State.
- ↑ Squabbling Sisters: Multinational Companies and Middle East Oil Prices. University of Cambridge.
- ↑ What are the Seven Sisters Oil Companies? - JC History Tuition. JC History Tuition.
- ↑ Brief History. OPEC.
- ↑ Power Grabs and Crude Decisions. Invisible Histories.
- ↑ Oil and Gas Industry: A Research Guide. Library of Congress.
- ↑ Business: The Seven Sisters Still Rule. TIME.