John D. Rockefeller's Oil Industry

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Lecture 6 was about John D. Rockefeller and the start of the oil industry. The oil industry really came about because of an increased need for an easier method of lighting. One way of doing this was through the refining of oil to make kerosene. One of the first men to find oil was colonel Drake, who was an oil explorer. Mr. Drake proved that oil could be drilled for and produced cheaply. So cheap in fact that you could profit nearly 15,000 dollars for every dollar of investment. This is what started the rush of people to try and lay claim to this fortune underground, and one of these men was Mr. Rockefeller. One of Rockefeller’s great strengths was his desire to save every penny he could. This is partly what made his business so successful, but also his desire to monopolize the industry of oil gave him a …show more content…

He not only wanted to horizontally consolidate, but also vertically consolidate. This is the act of controlling oil from start to finish and being able to completely control it. In just 9 years, Rockefeller controlled 90% of the oil industry. Because of his control, he could run other companies out of business by driving prices in an area so low that the competitors couldn’t compete with him and would need to sell out, which allowed him to keep this status. However, when Thomas Edison invented the light bulb, there was fear in the oil industry. But, when Henry Ford made the first automobile powered on gasoline, which was considered a useless by-product of the refining of kerosene, oil was now needed again. Lecture 7 was on the correlation between the need for oil and war in the Middle East. One of the major factors that drove us to invade Iraq was because they had oil.

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