ABSTRACT
The major foreign investment by Standard Oil was the establishment in 1888 of the Anglo-American Oil Co to market US refined products in England. From its very beginning oil was important in America's foreign trade. There were three factors present in the early development of the oil industry which made monopolisation possible. They were: the presence of scale economies in refining; the geographical distance between the major markets and the producing centres; and the limited supplies of crude oil available. The geographical separation of markets from sources characterised the early US oil industry. In the years immediately following the discovery of oil in Pennsylvania, crude producers sold their wares to refiners through the Oil City Exchange. This Exchange functioning like the ideal markets enabled buyers and sellers to come together. The US oil picture changed dramatically as a result of the Spindletop discovery in Texas in 1901, one of the great discoveries of all time.
